Volkswagen is asking workers to take a 10 percent pay cut

Volkswagen requires its own employees to donate 10 percent of their salary. The German carmaker says this is done to protect jobs and stay competitive.

The announcement goes against the wage demands made by German unions. They really want a 7 percent wage increase.

this morning Volkswagen announced that it had sold 4 percent fewer cars compared to the same period last year. The company also made much less profit: in the third quarter of 2024 it was 42 percent lower than in the same quarter last year. As a result, operating profit fell in the first nine months of this year from more than 16 billion euros to just under 13 billion euros.

According to the company, the high labor costs in Germany are a cause for concern. These would be an important reason for the current low profit margins. The company says that this means that they are ‘at risk of not being able to finance our future anymore’.

Volkswagen’s message comes at a time when there is already great unrest among workers. Earlier this week, the carmakers’ works council announced that Volkswagen wants to close at least three factories wants to cut tens of thousands of jobs. A possible pay cut was also discussed.

The company did not confirm this at the time, and in the new communication the car manufacturer only mentions the salary sacrifice requested. However, Volkswagen previously announced a major reorganization. So it is unclear whether accepting a pay cut could prevent factory closings or job cuts.

Nearly 300,000 people work in the ten German Volkswagen factories. The wage sacrifice that Volkswagen is now asking for would affect a large proportion of its workforce. The carmaker will resume negotiations with the unions at the end of November.