Volkswagen is considering major job cuts, wage reductions, and potential factory closures across Germany as part of its cost-cutting strategy, according to information from the company’s works council. Recently, the automaker presented proposals that include a 10% pay cut for all employees as well as a salary freeze for 2025 and 2026, which could result in the shutdown or downsizing of several German facilities.
The works council, led by Daniela Cavallo, mentioned that the proposed salary reductions might result in an overall pay decrease of up to 18% for some staff as a result of the removal of various bonuses and additional payments. In addition to wage cuts, the council revealed Volkswagen’s plans to close three plants in Germany and to scale back operations at all other locations, placing thousands of jobs in jeopardy.
Volkswagen management, including Human Resources Chief Gunnar Kilian, has emphasized that these steps are essential due to escalating costs and the need to stay competitive. The company points to rising energy, material, and labor costs as key factors influencing its current difficulties, noting that its German operations are becoming less efficient compared to competitors.
Kilian remarked, “Without these changes, future investments may not be financially possible,” highlighting that the adjustments are designed to secure Volkswagen’s long-term sustainability.
The German union IG Metall has expressed strong opposition to these plans. Lead negotiator Thorsten Gröger criticized the proposals as a “betrayal” of Volkswagen’s dedicated workforce, warning that if the company moves forward with these strategies, it may encounter resistance from union members.
Like other German manufacturers, Volkswagen is facing challenges in adapting to the transition toward electric vehicles amidst a slowing global economy. The company has revised its financial forecasts on two occasions this year and has altered labor agreements affecting certain groups of employees, such as apprentices and temporary workers. Moreover, Volkswagen seeks to eliminate its employment protection agreement that has been in place since 1994.
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