The key facts

  • According to IG Metall, Volkswagen has ordered salaries to be frozen at the 2026 level until 2030
  • The directive has been in effect since early October, replacing the previous approach of inflation compensation
  • IG Metall is demanding a 5% pay increase over 12 months; the company employs more than 660,000 people, 275,000 of them in Germany

Union reports salary freeze plan

German automaker Volkswagen plans to freeze salaries worldwide at the 2026 level until 2030, the union organization IG Metall said on Monday — just as wage negotiations begin in Germany. According to the union's publication, citing the company's European and global works council, Volkswagen's management board has instructed HR managers in all countries to suspend pay increases.

Details of the directive and employee reaction

The publication reported that the directive has been in effect since early October and replaced the previous budgeting approach, which provided for inflation compensation and locally agreed salary increases. The works council expects strong resistance to the plan, pointing out that decisions on salaries remain within the competence of local employers and unions. Works council president Daniela Cavallo on Sunday evening asked management to explain the plan to employees; according to the union, the leadership has not yet made a statement.

Union demands

IG Metall is seeking a 5% salary increase over 12 months. According to the union, Volkswagen employs more than 660,000 people worldwide, including 275,000 in Germany. Employee representatives warned that a prolonged salary freeze would undermine employees' purchasing power and called on management to focus on competitive products, technological progress, and cooperation within the group.