Against this backdrop, representatives of Volkswagen AG and IG Metall met today in Hanover. The two parties had previously invoked the reopener clause of the collective bargaining agreement for the future. The agreement expressly contemplates this process if there have been significant changes in the assumptions or economic conditions underlying the agreement of January 1, 2025. Volkswagen AG believes this to be the case.
The company’s objective is to systematically implement the previously agreed measures and fully exhaust all other options for a socially responsible headcount reduction.
Arne Meiswinkel, Chief Human Resources Officer of the Volkswagen brand and member of the Extended Executive Committee, said: “In the past 18 months, there has been a massive shift in the economic environment for the automotive industry and thus also for Volkswagen. These market changes are structural in nature and deep-reaching. Among other factors, Chinese manufacturers are increasingly pushing into Europe with competitively priced exports. This has placed enormous pressure on prices and significantly intensified competition. We therefore need to implement the Future Plan’s measures (Group Target Picture 2030) quickly and systematically to boost our competitiveness. Given the news from the automotive sector as a whole, I think everybody understands that we need to act now.”
In light of the extremely tense market environment, IG Metall’s demand for a 5 percent pay rise at the upcoming collective bargaining round is not compatible with the current situation of the company or the industry. On the contrary – it is even more important than before that Volkswagen reduces its overhead costs and adjusts them to a competitive level.
Volkswagen AG is giving formal notice to terminate several collective agreements, effective December 31, 2026, as the company considers various provisions in these agreements to require adjustment given the current cost pressure. By serving notice on the collective agreements, the company is creating negotiating space for further discussions.
The collective agreements remain in effect in accordance with statutory requirements, which means that nothing will change for Volkswagen AG employees for the time being. The collective bargaining agreement for the future – including its job security provisions – is expressly excluded from these measures.
Volkswagen AG and IG Metall have agreed to meet for further talks in the second half of October.
Volkswagen AG comprises Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, Volkswagen Group Components and the Group divisions.
- The situation throughout the automotive industry is extremely challenging. To secure the necessary room to maneuver, Volkswagen AG has followed IG Metall in invoking the reopener clause of the collective bargaining agreement for the future.
- The two parties met in Hanover today for initial negotiations. The company’s objective is to systematically implement the previously agreed measures and fully exhaust all options for a socially responsible headcount reduction.
- In light of the current economic challenges, Volkswagen AG has also given formal notice to terminate several collective agreements, effective December 31, 2026.
- The collective bargaining agreement for the future – including its job security provisions – is expressly excluded from these measures.
Hannover. The automotive industry is currently undergoing the most profound transformation in its history. Geopolitical tensions, trade barriers and increasing competition, primarily from China, are impacting the entire sector and have significantly exacerbated the financial situation of Volkswagen AG in recent years.
Overview:
- Why did Volkswagen terminate various collective bargaining agreements at the end of 2026?
Due to a very challenging market environment—driven in part by intense competitive pressure, particularly from Chinese manufacturers—Volkswagen AG must urgently cut costs to remain competitive. The termination opens up room for negotiation regarding necessary adjustments and the implementation of a socially responsible workforce reduction. - What does the termination of the collective bargaining agreements mean for employees?
For now, nothing will change for employees; furthermore, the important job security provisions from the “Future Collective Bargaining Agreement” are expressly unaffected by the termination. The existing collective bargaining agreements will continue to apply by law until new arrangements are reached with IG Metall. - How is Volkswagen responding to IG Metall’s wage demands?
Volkswagen firmly rejects the union’s demand for a five percent wage increase, as the extremely strained market situation instead requires immediate cost reductions. Both parties to the collective bargaining agreement have already held initial talks and will continue negotiations in the second half of October