
Just before Christmas, Volkswagen management and labor unions reached an agreement on a cost-cutting program. Today, for the first time, the workforce will be formally presented with the details of this extensive restructuring plan during a company assembly.
The Volkswagen management and works council are set to justify the agreed-upon savings measures in front of the workforce in Wolfsburg during the first assembly since the wage agreement was reached in December. Alongside Daniela Cavallo, the chairperson of the works council, Volkswagen’s brand chief Thomas Schäfer will also address employees.
During the previous workforce meetings, the company’s cost-cutting measures were met with strong resistance. Now, management faces the challenge of explaining the stringent restructuring plan, which both sides finalized just before the holiday season.
“Painful Cuts”
“The agreement contains several advantages for employees but also some painful concessions,” Cavallo admitted ahead of the assembly. “Being satisfied with the outcome does not mean there’s cause for celebration.”
After intense negotiations and multiple warning strikes, Volkswagen and labor unions reached an agreement on December 20. The restructuring plan includes the reduction of 35,000 jobs in Germany by 2030.
No Factory Closures
In return, Volkswagen has committed to avoiding plant closures and layoffs due to redundancy. Both of these had previously been deemed “red lines” by the IG Metall union and the works council. Furthermore, VW reinstated and extended its job security guarantee until 2030.
However, not all employees in Wolfsburg are convinced of the rationale behind these measures, especially when it requires them to accept financial sacrifices to sustain other company locations. The restructuring plan includes significant financial adjustments: holiday bonuses, performance-based incentives, and other allowances will be reduced or eliminated entirely. Additionally, salary increases have been frozen for the foreseeable future. From 2027 onward, Volkswagen’s in-house wage structure will be revised to align more closely with lower industry-wide salary standards.
Works Council Assures: No End to In-House Wage Structure
Unlike previous assemblies, where Cavallo primarily led opposition against the cost-cutting measures, this time, her speech may not receive unanimous applause. “Yes, the days of endless growth are over,” she acknowledged.
However, she sought to dispel concerns that the revised wage structure would mark the end of Volkswagen’s in-house salary agreements. “The reality is quite the opposite,” she stated. “We have secured our wage structure in the long run.”
CEO Blume Unlikely to Speak
Volkswagen Group CEO Oliver Blume will attend the assembly but is not expected to address employees. In the December meeting, held amid widespread warning strikes, Blume personally addressed the workforce but was met with vocal disapproval and even jeering from some employees.
The works council anticipates significant interest in today’s meeting, with around 60,000 employees from the main Wolfsburg plant expected to attend. As a precaution, the event will be broadcast via video screens outside the factory premises in case the main hall reaches capacity.