Volkswagen’s top management will face salary reductions totaling over €300 million by 2030, as revealed by Gunnar Kilian, a member of the automaker’s human resources board. This decision follows a significant deal with unions that Volkswagen finalized in December.
According to Kilian, the company’s board members will bear a larger portion of the salary cuts compared to other managers or employees. “Volkswagen’s board would lose a larger proportion of their salary than the rest of management or the workforce,” Kilian shared with Braunschweiger Zeitung, although he refrained from providing further specifics.
The recent agreement, reached with unions, has averted immediate plant closures and includes a cost-saving strategy aimed at generating €15 billion in annual savings over the medium term. This plan involves €1.5 billion in labor cost reductions, alongside a workforce reduction of 35,000 employees by 2030. Additionally, production capacity at Volkswagen’s German factories will be scaled back by 734,000 units.
The deal, hailed by union leaders as a “Christmas miracle,” was the result of months of negotiations that began in September. Labour representatives had pushed for senior management to share the burden of the company’s financial difficulties. Volkswagen’s sales have taken a hit both domestically and internationally, with rising competition from more affordable Chinese-made models.
