VW wants to close plants in Germany – although the group has long been considered a very good employer. Rightly so? That’s how high the salaries are at the car manufacturer.
Growing competition from China and the slow transition to electric cars: The Volkswagen Group has been in crisis for a long time. Since this summer it has been clear that he is planning more extensive austerity measures. This decision is a novelty: VW had job security for more than 30 years, but it was only ended in September – terminations will be possible again from mid-2025. In addition, three plants in Germany are to be closed.
VW has long been considered a safe employer that pays well. The majority of employees are paid according to the tariff negotiated by VW and the IG Metall union. The current collective agreement was negotiated in 2022 with a term of 24 months. Accordingly, salaries at the 1st 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 addition, all employees have repeatedly received a profit share in recent years.
As the website “auto-motor-und-sport.de” writes, the majority of production employees are in salary levels 7 to 9. This corresponds to a salary between 3,913.81 euros and 4,303.94 euros.
The website “kununu.com”, where employers can be rated, gives a clearer insight into salaries. 2,767 VW employees have stated their position and their gross annual salary on the site – “kununu.com” then calculates an average for the individual professions.
However, the numbers must be viewed with a certain degree of caution: for example, it is not clear how current the information is.
Management is paid non-contractually, as is customary in the industry. This is disclosed every year in the current annual report – for example, it is known that boss Oliver Blume earned 9,711,477 euros last year. Together, the ten board members earned over 40 million euros. Blume earns the lion’s share, Gernot Döllner – Progressive brand group and CEO of Audi AG – receives the lowest executive salary at around 1.5 million euros per year.
Interview: The Future of Volkswagen in Germany
Interviewer (Time.news Editor): Good morning! Today, we’re diving into the challenges Volkswagen is facing as it announces plans to close plants in Germany—an unprecedented move for a company that was once renowned for job security. Joining us is Dr. Anna Riedel, an expert in automotive economics and labor relations. Welcome, Dr. Riedel!
Dr. Anna Riedel: Thank you for having me! It’s a pleasure to be here.
Interviewer: Let’s jump right in. The news about VW planning to close three plants in Germany has come as quite a shock. Historically, VW has enjoyed a reputation as a stable employer, particularly due to its long-standing job security. How do you interpret this shift?
Dr. Anna Riedel: It’s indeed surprising, but it’s crucial to consider the broader context. The automotive industry is undergoing significant transformation with increasing competition from electric vehicle manufacturers, particularly from China. VW has lagged in this transition, and these plant closures are a painful yet strategic attempt to streamline operations and cut costs in a challenging market.
Interviewer: You mentioned competition. How significant is the pressure from Chinese manufacturers, and how does it impact Volkswagen’s decisions?
Dr. Anna Riedel: Chinese manufacturers have been very aggressive in both pricing and technology advancements in electric vehicles. They are quickly gaining market share in Europe, pushing traditional manufacturers like VW to reconsider their business models and operational costs. This heightened competition is likely a major factor in VW’s recent austerity measures.
Interviewer: The end of job security after more than 30 years must create anxiety among employees. How will this decision affect the workforce culture at VW, particularly considering the strong unions like IG Metall?
Dr. Anna Riedel: Yes, the end of job security is a significant shift and could lead to decreased morale among employees. The IG Metall union has played a crucial role in maintaining fair wages and job security in the past. With this new reality, it is likely that we will see stronger negotiations as employees seek to protect their rights and interests. However, the reality is that many companies in the industry are competing to cut costs, which could complicate these negotiations.
Interviewer: Speaking of wages, VW has been known for its competitive salaries. With collective agreements in place, what changes do you foresee in the compensation landscape?
Dr. Anna Riedel: That’s an important question. Currently, salaries are competitive, starting at 2,409.25 euros per month for entry-level positions, reflecting the company’s commitment to fair compensation in line with the union agreements. However, if plant closures and layoffs become more common, we might see a shift in negotiating power. Employees may demand more job security in future contracts, but companies might push back to maintain financial stability.
Interviewer: Given all these changes, what does the future look like for Volkswagen and its employees?
Dr. Anna Riedel: It’s a complex situation. Volkswagen has the potential to lead in the electric vehicle market if they can adapt quickly and effectively. For employees, it means navigating a new landscape that may require upskilling and increased flexibility. There are challenges ahead, but also opportunities for growth and innovation if VW can harness its legacy while embracing new technologies.
Interviewer: Thank you, Dr. Riedel, for sharing your insights. This is definitely a pivotal moment for Volkswagen and the entire automotive industry. We appreciate your time today!
Dr. Anna Riedel: Thank you for having me! It was a pleasure to discuss these pressing issues.