Volkswagen ends most German wage deals as unions warn of confrontation

Volkswagen will terminate most of its collective wage agreements in Germany at the end of 2026, opening a new dispute with employee representatives as the carmaker seeks to reduce costs. The company announced the decision after a meeting with representatives in Hanover on Wednesday. It said provisions in the agreements needed to be adjusted because of cost pressures and that ending them would create scope for negotiations.

Volkswagen said employment-security provisions agreed in 2024 and scheduled to run until the end of 2030 would not be affected. The source material does not specify which wage provisions will be renegotiated or what changes the company will seek. The decision was criticised by Germany’s IG Metall union.

Its official Thorsten Gröger accused Volkswagen of targeting employees, while works council chair Daniela Cavallo predicted a difficult dispute around the end of the year. Union leaders have also threatened strikes. The move follows an agreement reached earlier this month between the carmaker and unions to eliminate 100,000 jobs across Volkswagen’s 10-marque group by the end of the decade.

The restructuring was described as the largest in the history of the global auto industry. The wider German automotive sector is also undergoing organisational changes. BMW plans to remove 20 per cent of its divisions and associated management roles by mid-2027 and increase its use of artificial intelligence.

The company said the move was not linked to a large-scale reduction in total headcount. BMW had already announced a voluntary redundancy programme outside production, with company sources estimating that its global workforce could fall by about 8,000. The reported cuts are expected to affect administration and research and development in Germany.

The Volkswagen wage decision now places its management and unions at the centre of another labour dispute.