‘Power Agreement’ – collective bargaining agreement concluded for Volkswagen’s battery company PowerCo

Following intense negotiations, the Volkswagen Group’s new battery company PowerCo SE and the management of IG Metall Lower Saxony and Saxony-Anhalt have reached agreement in the collective bargaining process. The collective bargaining agreement for PowerCo, which was established in summer 2022, comprises a framework agreement on employment conditions, a remuneration framework agreement and a collective wage agreement and enters into force on May 1, 2023.

The collective bargaining agreement has the following main elements:

• Flexible elective working hours for staff (six levels between 28 and 40 hours per week)
• Option to spread working hours flexibly over four to five weekdays and also work on Saturdays
• Lean, transparent, activity-based remuneration system with nine wage brackets
• Variable remuneration based on achievement of corporate targets
• Company pension: collective bargaining element agreed

Going forward, PowerCo employees will be able to make flexible adjustments to their weekly working hours while taking the needs of the company into account. For instance, twice per year staff will have the opportunity to change their working hours in six levels between 28 and 40 hours per week in agreement with their supervisor. Staff who work up to 35 hours per week will be able to divide their working time between four working days including Saturdays taking operational requirements into account. Part-time employment under 28 hours per week is also possible.

In addition, employees can take up to ten days of unpaid leave per calendar year plus up to six months of paid time off as part of a career break pre-financed by the employer.

Sebastian Krapoth, Chief Human Resources Officer of PowerCo, commented on the agreement: “The new collective bargaining agreement will enable us to achieve a good work-life balance and accommodate the wish of our employees to have more flexible working arrangements. Other benefits such as the agreement on a collective bargaining element for the company pension, the option of salary conversion and a variable remuneration component tied to company performance make the collective bargaining agreement an attractive package overall.”

Volkswagen’s chief negotiator and Chief Human Resources Officer of the Volkswagen Passenger Cars brand Arne Meiswinkel stressed: “The collective bargaining agreement for PowerCo is another step towards our strategic goal of actively shaping collective working conditions in the Group as a key element of remaining competitive. Elements such as a lean remuneration system, a 37.5-hour working week and elective working hours for employees of between 28 and 40 hours per week show how competitiveness and employer attractiveness can be reconciled.”

“Because we are still a young high-tech company in the strategically important battery sector, flexibility with lean and efficient structures is crucial if we are to be competitive internationally from the get-go,” Krapoth added. “At the same time, it is fundamental for PowerCo to provide ideal working conditions

for all groups of employees. I firmly believe that the new collective bargaining agreement will make us as an employer exceedingly attractive for our employees and for all experts who join us in the future. This is important because we are looking to inspire talented people worldwide to join us on our exciting battery mission.”

The outcome of the negotiations on the collective bargaining agreement has yet to be approved by the boards of both parties to the agreement.

PowerCo SE was founded in July last year and brings together the Volkswagen Group’s global battery activities. This will be accompanied by strong personnel growth at the battery company, which is to employ up to 1500 people in the first year after its foundation.

The new collective bargaining agreement covers all PowerCo employees in Germany and runs until the end of 2025.