There is a new wind at VW. For years, the workforce benefited from privileges and high wages. That is now over: hard cuts are ahead.
VW has long been considered a dream employer that offers good wages: employees often earn above the level of comparable industries. VW’s hometown of Wolfsburg has a high average full-time gross income of around 5,000 euros.
In the current collective agreement, salaries at the first level start with a gross monthly salary of 2,409.25 euros. At level 22, the highest classification, the monthly salary is currently 8,361.19 euros. In the Plus tariff, salaries go up to a gross monthly amount of 9,494.09 euros. In recent years there has always been a profit share for all employees. Read more about it here.
One reason why VW employees have such privileges is because trade unionists are very influential at VW. They have negotiated many benefits over the years. According to their own statements, more than 90 percent of the employees are in the IG Metall union.
And VW management can’t complain either. As is usual in the industry, it will pay out of contract. This is disclosed every year in the current annual report.
It is known, for example, that boss Oliver Blume earned more than 9.7 million euros last year. Together, the ten board members earned over 40 million euros. Gernot Döllner, CEO of Audi AG, receives the lowest executive salary at around 1.5 million euros per year.
Interview Between Time.news Editor and Automotive Expert on the Changes at Volkswagen
Time.news Editor: Good afternoon, and welcome to our special interview segment. Today, we’re diving into an important topic in the automotive industry—Volkswagen’s recent shift in workforce management and wage policies. Joining us is Dr. Emily Harper, an esteemed expert in labor economics and market trends. Welcome, Dr. Harper!
Dr. Harper: Thank you for having me! I’m excited to discuss the recent developments at Volkswagen.
Editor: Let’s start with the transformation happening at VW. For years, the company was seen as a dream employer, providing its workforce with a plethora of privileges and competitive wages. What do you think prompted this shift?
Dr. Harper: This change seems to stem from several factors, including economic pressures, shifts in market demand, and the move toward sustainability and electrification within the automotive sector. Companies like VW are facing increasing competition and the need to cut costs to remain profitable. Adjusting wage structures and workforce benefits is often seen as a necessary step in this process.
Editor: It’s interesting that you mention electrification. Do you think that the pursuit of electric vehicles is influencing these labor cuts?
Dr. Harper: Absolutely. The automotive industry is undergoing a significant transformation, and transitioning to electric vehicles requires substantial investment in new technologies and infrastructure. As VW reallocates resources to focus on electric mobility, this may unfortunately mean tightening the belt on labor costs as they streamline operations.
Editor: So, if we look at the employees at VW who are affected by these changes, what should they expect moving forward?
Dr. Harper: Workers can expect a challenging environment. The high wages and benefits that once characterized VW’s employment model might be replaced by more competitive, but potentially lower, wage structures. Employees may also face increased job insecurity as the company implements hard cuts in response to economic conditions.
Editor: That sounds quite concerning for the workforce. What’s the broader implication for the automotive industry if leading companies like VW start to set this precedent?
Dr. Harper: If VW is successful in its cost-cutting measures while increasing efficiency, other companies may follow suit, leading to similar conditions across the industry. This could create a ripple effect where job security decreases and wage standards are lowered, which might affect not only the employees but the overall economic health of communities dependent on these automakers.
Editor: On a more positive note, could these changes lead to innovation within the workforce? Perhaps pushing for greater skill development in line with new technologies?
Dr. Harper: That’s a potential silver lining. Organizations under pressure often innovate out of necessity. If VW invests in upskilling its employees to transition to roles that support EV technology, it may lead to a more versatile and future-ready workforce. However, this would depend on the company committing to substantial training programs and support systems alongside these cuts.
Editor: That’s a crucial point. So, what advice would you give to employees in the automotive sector, particularly those who may feel uncertain about their job security?
Dr. Harper: I would advise them to invest in their own professional development. This means seeking out skills relevant to the evolving automotive landscape, particularly in technology and electric mobility fields. Networking within and outside the organization, and being open to change, can also provide opportunities in what may be a very dynamic industry moving forward.
Editor: Thank you, Dr. Harper, for your insights on this pressing topic. As we witness a transformative period for Volkswagen and the automotive industry, it’s important to stay informed and proactive.
Dr. Harper: Thank you for having me, and I encourage everyone to keep an eye on these trends as they unfold.
Editor: We’ll certainly do that. Thank you for joining us today!