Volkswagen Ends Collective Agreements as Union Prepares for Strike in Early 2027

Key Facts

On September 30, Volkswagen announced it would terminate several collective agreements effective December 31, 2026, raising the prospect of an escalation in talks with IG Metall early next year. The company said the terminations cover labor agreements, while the union said it was prepared to strike from January 1, 2027, to restore the terminated agreements. The decision does not immediately change employees’ terms, as the current agreements remain temporarily in force under the law. The company also explicitly excluded the Future Agreement, including its job-guarantee provisions, from the current measures. The dispute is therefore focused on the wage and working conditions that will replace the terminated agreements, while the job guarantee remains in force under a separate agreement.

IG Metall identified the agreements concerned as covering the wage agreement, framework agreement, job classification, additional compensation, performance and staffing assessments, parts of the vocational training agreement and other agreements. According to Reuters, this includes the wage framework covering around 100,000 workers at major German plants and regulating working hours, vacation bonuses and other labor standards. The union said the job guarantee was unaffected by the company’s terminations, runs through the end of 2030 and cannot be terminated before then. Volkswagen, for its part, confirmed that the job-guarantee provisions were explicitly excluded from its current measures. The agreements’ expiration at the end of 2026 therefore does not end the job guarantee at the same time.

Volkswagen linked its decision to competitive and financial pressures, saying geopolitical tensions, trade barriers and rising competition, particularly from China, were affecting the entire sector. It added that competitively priced Chinese exports were putting pressure on prices, while cutting overhead had become necessary to bring it into line with the level of competition. The company considers IG Metall’s demand for a 5% wage increase in the next round of talks incompatible with the current situation. The union says its demand includes a 5% increase over 12 months, with a social component benefiting employees in lower wage grades. Against this backdrop, the group’s operating profit fell to 8.9 billion euros in 2025, down 53% from 19.1 billion euros in 2024.

The union has offered counterfigures to the case for cost cuts, saying employees are giving up around 1.5 billion euros a year under concessions accepted at the end of 2024. It also said the group’s labor-cost share fell from 17.5% in 2021 to 15.2% in 2025. The human resources chief at the Volkswagen brand said the company had terminated 10 of 13 collective agreements and that its programs aimed to cut costs by around 20 billion euros by 2030 compared with the current plan. He added that planned investment under the Future Plan totals 135 billion euros through 2031, linking its implementation to swift action in response to global competition. These targets form part of a broader framework for the company’s push to cut costs, alongside the ongoing dispute over wages and agreements.

The current dispute follows an earlier labor confrontation in 2024, when Volkswagen’s cancellation of parts of the collective-agreement framework led to a wave of strikes that ended with a historic agreement covering 35,000 job cuts, according to Reuters. In September 2026, the supervisory board approved a transformation plan that includes cutting a further 50,000 jobs across the group, the news agency reported. This background makes the new negotiations more sensitive for employees and the union, as the dispute over agreements coincides with restructuring and spending-reduction plans. But the company has kept the job guarantee outside the current terminations, while IG Metall says the guarantee runs through the end of 2030. Volkswagen said its representatives and the union will meet for another review on October 23, 2026, with the next round of collective bargaining to begin no later than early December.