Volkswagen considers holding salaries at 2026 levels until 2030

Volkswagen employees could go four years without a salary increase if a proposal reported by the company's works council goes ahead. The plan would keep salaries at their 2026 levels until 2030. Reports put the number of employees potentially affected at around 660,000 worldwide, although the exact scope of the proposal still needs to be clarified.

For workers, the problem is what happens between now and then. A salary that covers the monthly bills today may not go as far in three or four years, particularly if food, rent, fuel and other expenses continue to rise. The proposal comes as Volkswagen looks for ways to control spending in a car market where competition is getting tougher.

The cost of building cars

Volkswagen has to spend money on new models, factory operations and the development of electric vehicles. It also faces competition from Chinese manufacturers, which have been putting pressure on established brands with a wider range of competitively priced cars. Keeping costs under control is important, but the company has several expenses to consider. A salary freeze would limit increases in its wage bill, although the actual savings would depend on how the proposal is applied.

For employees, however, the effect would be felt in their pay packets rather than in the company's financial statements.

The questions workers will ask

There are still details to establish. Would the freeze apply to every employee? Would bonuses and other payments remain unchanged? And would there be room for salary increases if the company's financial position improves before 2030? These questions will matter when the proposal is discussed with employee representatives. A freeze on salary increases is also different from a salary cut. Workers would continue receiving their existing basic pay, but they would miss out on increases during the period covered by the plan.

No final agreement yet

The proposal has not been confirmed as a final agreement. Volkswagen and its employee representatives will need to clarify the terms and determine whether the plan can go ahead. For now, the central issue is how Volkswagen intends to reduce its costs and how much of that adjustment it expects employees to accept. A four year salary freeze would be a significant change for workers, especially if their living costs continue to rise during the same period.