Volkswagen works council confirms plans for pay freeze until 2030

Volkswagen plans to suspend pay rises until 2030, the group’s global works council said, confirming to Reuters an earlier Sueddeutsche Zeitung report on internal management plans.

According to the newspaper, the company intends to reduce a pay-rise budget that previously reflected inflation and other factors. The documents allow for differing circumstances across national operations, rather than constituting an agreed worldwide collective settlement.

The works council called management’s approach absurd and warned of employee resistance. The IG Metall union said pay levels were determined through negotiations rather than executive orders.

Sueddeutsche Zeitung estimated that inflation could reduce affected employees’ real incomes by around 10 percent.

Volkswagen declined to comment on what it called speculation. A company spokesperson told Reuters that proposals on labour costs would be discussed during a new round of talks later this week.