Volkswagen terminated wage agreements

Hanover, Germany (dpa) — Volkswagen has terminated the majority of its collective wage agreements in Germany, sparking a potential renewal of bitter disputes with employee representatives as the automotive giant seeks to cut costs.

Various provisions in the agreements must be adjusted in light of cost pressures, the company said after a meeting with employee representatives in Hanover on Wednesday.

Arne Meiswinkel, human resources director at the core VW brand, said the economic situation has deteriorated sharply for the automotive industry, with increasing competition on prices.

“These market changes are structural and far-reaching,” he said, warning that “Chinese manufacturers are pushing into Europe with cheap exports.”

The IG Metall union and works council quickly announced their opposition.

“This is a foul blow against the workforce and once again a shameless attempt to reach into employees’ pockets,” said union official Thorsten Gröger.

Volkswagen terminated wage agreements

VW works council chairwoman Daniela Cavallo predicted a “bitter dispute at the turn of the year.”

By terminating the agreements on schedule by December 31, 2026, Volkswagen is aiming to open up room for negotiation. Employment security provisions agreed in 2024 until the end of 2030 are not affected.

The latest blow to employees comes weeks after the supervisory board at the Volkswagen Group – which owns subsidiaries such as Porsche, Škoda and Audi – agreed on a “future plan” drawn up my management aiming to make the company significantly more profitable.

Worldwide, chief executive Oliver Blume intends to strike 50,000 jobs in the coming years.

Brands and subsidiaries have been tasked with implementing the cuts, half of which could fall on German sites. In addition, the fates of four German plants are still unclear.