Volkswagen’s battery subsidiary PowerCo has reached a collective agreement with the IG Metall union guaranteeing job security for its workforce in Salzgitter, Germany, until the end of 2030, providing stability amid uncertainty in the electric-vehicle battery sector.
The deal protects roughly 2,000 employees from redundancy for operational reasons and will run from March 1, 2026, through Dec. 31, 2030, according to IG Metall’s Lower Saxony and Saxony-Anhalt district. The agreement forms part of a broader bargaining package covering employment terms and compensation.
PowerCo was established as an independent subsidiary in 2022 to spearhead Volkswagen’s battery cell production strategy, initially with plans for multiple factories across Europe. Those ambitions have since been scaled back, with only plants in Salzgitter and Sagunt, Spain, currently under development on the continent. Production of Volkswagen’s standardized battery cell began in Salzgitter in late 2025, though expansion to the planned 40 gigawatt-hour capacity has been paused. Another facility in St. Thomas, Canada, is under construction.
The job security pact comes as the Volkswagen Group pursues significant cost reductions, with Chief Executive Oliver Blume reportedly targeting a 20% cut in expenses by 2028, according to reports by Manager Magazin. The agreement provides reassurance to employees amid speculation about budget cuts, restructuring and potential plant closures across the group.
“For IG Metall, it is clear: those who produce battery cells play a decisive role in shaping the industrial future of the automotive sector,” the union said, adding that the agreement balances economic realities with social stability.
In addition to employment guarantees, the package includes wage measures. Existing pay scales will be reinstated, with a 5.5% increase scheduled to take effect in April 2031 and incorporated into pay structures from April 2027. Long-serving employees will also receive one-off bonuses of 6,000 euros for 25 years of service and 12,000 euros for 35 years.
PowerCo Chief Human Resources Officer Sebastian Krapoth said the deal reflects current industry challenges while supporting long-term competitiveness. “It provides planning security and sends an important signal to our workforce,” he said.
IG Metall negotiator Alina Roß described the employment guarantee as the core of the agreement, noting that workers need reliable prospects amid shifting investment decisions and volatile markets. She added that in-house battery production strengthens technological expertise and industrial autonomy within Europe’s growing electric-vehicle ecosystem.
