Volkswagen has decided to pay a one-time bonus of €1,250 to around 100,000 tariff employees at its core brand in Germany, the company announced on Thursday. The payment will be made alongside May salaries and marks a reversal of an earlier agreement that had suspended such payouts as part of a broader savings programme.
The decision represents a significant shift from a deal struck at the end of 2024, when both management and the works council had agreed to pause the traditional May bonus payment for 2026 and 2027. What changed the calculation was Volkswagen’s net automotive cash flow for 2025 which came in at more than €6 billion, far above initial projections that had anticipated a figure close to zero.
That cash flow figure carries weight beyond investor relations. It forms a key component of variable executive compensation at the group level, meaning senior managers stand to benefit handsomely from the better-than-expected result. As word of the so-called “cash flow surprise” became public, pressure mounted from the workforce to share in the upside.
Works council chair Daniela Cavallo, recently re-elected to her position, moved quickly to make bonus payment a central demand. Speaking to employees at a works assembly, she framed the issue as a matter of basic fairness: if those at the top were going to benefit from the improved figures, so should those on the factory floor.
Negotiations proved difficult. According to sources close to the works council, management had initially been willing to approve no more than €500 per employee. Cavallo pushed for €1,500. The company is said to have put €1,000 on the table at an intermediate stage before the two sides eventually agreed on €1,250. Group legal chief Manfred Döss attracted criticism at a previous works assembly in Wolfsburg after a legal opinion he commissioned was seen as delaying the negotiation process.
Brand chief Thomas Schäfer acknowledged the difficult backdrop while defending the decision to pay the bonus. “We are going through a difficult period of restructuring,” he said. “It is a challenging time for all of us in the company, and it comes with many uncertainties. And we have not yet reached our destination.” Despite that, he said employees were bringing expertise, commitment and team spirit to the task of shaping Volkswagen’s future, and that deserved recognition.
Works council chair Cavallo echoed that framing. The strong performance of the Volkswagen brand had contributed to the broader group result, she said, and it is only right and fair that all employee groups now benefit from that.
The €1,250 payment applies to tariff-grade employees across Volkswagen’s six western German sites as well as its factories in Saxony, which have been operating under the company’s own collective agreement since the start of 2026. The Osnabrück plant is excluded, as employees there are already receiving a separate bonus payment this year.
Part-time workers will receive a proportional share of the bonus. Those in part-time pre-retirement schemes will receive half the amount. Combined with the November bonus that was preserved in the end-of-2024 deal, Volkswagen employees will receive a total of €3,130 in additional payments this year. While lower than in previous years, it is more than the workforce had initially been led to expect given the extent of the savings programme underway.
The bonus comes as Volkswagen presses ahead with one of the most significant restructuring programmes in its history. The plan agreed with the IG Metall trade union at the end of 2024 envisages the elimination of 35,000 positions at the core VW brand in Germany by 2030.
The company has said that more than 25,000 departures have already been contractually agreed, primarily through phased early retirement arrangements and voluntary separation agreements. Compulsory redundancies have been ruled out under the terms of the agreement with IG Metall. At group level, Volkswagen reported a 44 percent drop in after-tax profit in 2025 bringing the figure to €6.9 billion.
From breaking news to thought-provoking opinion pieces, our newsletter keeps you informed & engaged.
