The head of the entire Volkswagen Group, director Oliver Blume, earns a salary of $10 million per year. Now, he’s pushing for a 10 percent wage cut for employees.
Volkswagen’s top management isn’t exactly looking good, especially amid reports of lavish spending and sky-high salaries during a crisis.
Blume, the man with the highest responsibility in the Volkswagen Group, is proposing a 10 percent salary cut for workers to help ensure Volkswagen’s survival as a brand. In advance of the next round of collective bargaining negotiations, more details have emerged, casting Blume in an even worse light.
The German automotive giant, with 120,000 employees across six locations in Germany, plans to negotiate a pay reduction of approximately 10 percent for factory workers. This would mean some employees would see their annual salaries drop to around $3,800 USD.
In comparison, Volkswagen’s management team earned an average of $6.5 million last year, with Oliver Blume himself receiving a total salary package of $10 million, including pension.
This cost-saving initiative, projected to save Volkswagen around 4 billion euros (approx. $4.2 billion USD), is part of a larger strategy to address the company’s financial challenges. In addition to wage cuts, management is also considering closing several factories, which could lead to further layoffs.
The exact details of these cuts have yet to be finalized, as negotiations with the 120,000 affected employees are set to begin at the end of October.
However, according to Wolfsburger Allgemeine Zeitung and German business media Handelsblatt, wage cuts and factory closures remain central to Volkswagen’s savings plan.
Volkswagen employs a total of 296,134 people in Germany, with factory workers expected to bear the brunt of the cost-saving measures.
Volkswagen isn’t alone in implementing cost-cutting strategies; subcontractor ZF, which specializes in manufacturing automatic transmissions, is working on a savings plan of up to $6.2 billion.
