Daniela Cavallo in Wolfsburg: The works council leader is pushing for workforce participation. Photo: dpa
Dusseldorf. In the middle of the works council election campaign, Volkswagen’s top employee representative is calling for the workforce to participate in the surprising billion-dollar cash flow. The payment should be made in May 2026 and will partially replace the no longer applicable tariff bonus.
As a reminder: At the end of January, Volkswagen announced in a mandatory announcement that it had achieved a net cash flow of around six billion euros in its core business for 2025 – although management had previously assumed a value “around the zero line”. Since then, the group has been discussing how the inflow of money came about and who benefits from it.
For the works council, the matter is clear: the workforce has accepted significant cuts in recent years in order to stabilize the group. “If everyone has now performed so well in terms of cost discipline that the net cash flow is correct, a recognition bonus is only fair,” says an internal letter that is available to the Handelsblatt.
The net cash flow is considered the central control parameter at Volkswagen. It influences the credit rating and dividend policy and is an important component of the variable compensation of the board of directors – i.e. the bonuses that management receives.
However, the bonus does not depend solely on cash flow. In addition, the operating return on sales is also included in the evaluation. This second key figure in particular continues to worry management. After a billion-dollar write-off at Porsche and weak business development, the return is expected to be only two to three percent – well below the target values. It is therefore unclear whether the combination of cash flow and margin is sufficient for the full bonus level.
VW employee participation was actually withdrawn – and is now supposed to partially return
Employees, on the other hand, have already accepted cuts in the so-called Christmas compromise at the end of 2024. After tough collective bargaining, management and the union agreed that the employees would temporarily forego part of their bonus. At that time, the board and management had also accepted reductions in their total compensation.
Although the advance payment for employees remains in November, the second tranche in May will no longer apply in 2026 and 2027. The works council now wants to ensure that a compensation payment is still made in May 2026.
The scope and design are currently being negotiated with the board, according to the internal employee information. The first indications of the status of the talks are expected at the works meeting on March 4th at the main plant in Wolfsburg.
Volkswagen
“The dimension came as a surprise”: Sudden billion-dollar cash flow could bring bonuses to VW managers
The debate is given additional explosiveness by the ongoing works council election campaign. VW employees will elect new representatives in March. Opposition lists have previously criticized possible bonus payments to top management and called for greater workforce participation. Cavallo is now taking up these demands. Dealing with billions in cash flow has therefore become a central election campaign issue.
At the same time, doubts are being raised about the sustainability of the inflow of money. Analysts expect the majority to come from inventory reductions, faster cash collections and stretched liabilities. They warn of a possible countermovement in the current year.
Volkswagen still under cost pressure
CFO Arno Antlitz said in an internal interview: The improvement in net cash flow was the result of “intensive cost work” in development, investments and inventories. Media reports about short-term optimizations would “discredit the successes of our colleagues”.
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At the same time, the CFO admitted that even the management was surprised by the extent of the final spurt. “The extent of the improvement was indeed surprising,” it said. The strong increase occurred primarily in the second half of the year. Antlitz did not comment on possible burdens due to catch-up effects in the current year.
Volkswagen continues to be under enormous cost pressure. The group decided on strict austerity measures at the end of 2024. In Germany, around 35,000 jobs are expected to be eliminated by the end of the decade, and costs are expected to fall by 15 billion euros annually. At the same time, the conversion to electromobility and new future software require high investments.