Volkswagen’s €300 Million Wage Cut Plan: A Sign of Tough Times Ahead for Execs and Workers
Daniel Kim Views
Volkswagen plans to implement wage cuts for managers, extending beyond the previously agreed union wage reductions.
On Monday, Gunnar Kilian, a member of Volkswagen’s Personnel Committee, announced that the company aims to reduce wages by over €300 million (approximately $310 million) by 2030.
Kilian noted that the Volkswagen board intends to impose deeper salary cuts on executives than other employees, though he did not provide specific details.
In a groundbreaking agreement last December, Volkswagen and the union agreed to reduce the workforce by 35,000 employees and cut production by 734,000 units at German factories by 2030 to lower costs.
Volkswagen previously stated that this agreement would save €1.5 billion (around $1.55 billion) in labor costs, contributing to a broader annual cost reduction of €15 billion (approximately $15.48 billion) in the medium term.
During negotiations, the union criticized the company’s management for making poor strategic decisions, arguing that leadership should be held accountable and that salary reductions should be part of the cost-cutting measures.
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