Volkswagen Pulls Out of Union Agreements as Pay Talks Heat Up

Volkswagen is tearing up parts of its labor deal with IG Metall, serving notice to end several collective agreements at Volkswagen AG effective 31 December 2026. The move reopens the contract that only came into force in January 2025, though the job security provisions attached to it are being kept off the table.

Both the company and the union triggered the agreement’s reopener clause, which can be activated when underlying economic conditions shift dramatically. The two sides met in Hanover, where Volkswagen pushed for its agreed efficiency measures to be carried out in full and for job reductions to be handled in a socially responsible manner.

Management also turned down IG Metall’s call for a 5% wage increase, insisting that overhead costs have to come down instead. Until a replacement deal is reached, the terminated agreements remain legally binding, so workers’ terms are unchanged for the time being. Negotiations are set to continue in late October.

Volkswagen brand Chief Human Resources Officer Arne Meiswinkel framed the decision as a response to structural pressures, pointing to increasingly aggressive competition from Chinese manufacturers exporting into Europe at competitive prices, which he said has squeezed pricing and sharpened rivalry across the sector. He added that the company’s Future Plan, known as Group Target Picture 2030, must be rolled out quickly to restore competitiveness.