PowerCo and IG Metall secure jobs until 2030

The job security agreement is part of a new collective bargaining package negotiated between the trade union and the company, as announced by IG Metall’s Lower Saxony and Saxony-Anhalt district. The collective agreement will run from 1 March 2026 to 31 December 2030.

The Volkswagen Group spun off PowerCo SE as an independent subsidiary in 2022, with ambitious plans for battery production. At the time, six PowerCo factories were planned across Europe alone to manufacture battery cells for the group’s electric vehicles. These plans have since been significantly scaled back, with only the factories in Salzgitter and Sagunt (Spain) currently under development in Europe. In Salzgitter, the Group’s standardised battery cell has been in production since the end of 2025, though the expansion to full capacity of 40 GWh has been paused. The factory near Valencia is scheduled to begin production in July 2027. Additionally, PowerCo is constructing a battery cell factory in St. Thomas, Canada.

In light of the scaled-back plans and allegedly drastically reduced budgets for PowerCo, questions have recently arisen about the company’s future prospects; specifically, whether in-house battery cell production remains viable or if purchasing cells outright might prove more cost-effective given the current pace of market development. The collective bargaining package, which includes job security until the end of 2030, now provides greater clarity and reassurance for employees. “For IG Metall, it is clear: those who produce battery cells play a decisive role in shaping the industrial future of the automotive sector. This collective agreement reflects this strategic importance and combines economic requirements with social reliability,” the union stated.

Higher pay for PowerCo employees

Recent reports have highlighted further, drastic cost-cutting measures within the Volkswagen Group. According to one report, VW CEO Oliver Blume set a target in January to reduce costs by 20 per cent by 2028, equivalent to around 60 billion euros for the VW budget. All brands are expected to contribute, and insiders have even raised the possibility of plant closures in light of these figures. The collective agreement, which includes job guarantees at PowerCo, thus sends a critical signal during these uncertain times.

In addition to the agreement to refrain from redundancies for operational reasons during the term of the package, a pay deal was also reached. The pay-scale agreement terminated on 13 March 2023 will initially be reinstated. Furthermore, a 5.5 percent increase in pay-scale wages was agreed, effective from 1 April 2031. However, the 5.5 per cent increase will be integrated into the pay-scale index from 1 April 2027 and will have a permanent effect on the pay tables. The pay-scale agreement can first be terminated on 31 March 2027. From 1 April 2026, employees with 25 years of service will receive a one-off gross payment of 6,000 euros, while those with 35 years will receive 12,000 euros as a collectively agreed dynamic bonus.

According to PowerCo’s Chief Human Resources Officer, Sebastian Krapoth, the agreement addresses the current challenges facing the battery industry and strengthens the company’s future and competitiveness by deferring the pay increase. “It provides planning security and sends an important signal to our workforce,” Krapoth said. “We are taking a similar approach to Volkswagen AG and ensuring that we can continue to pursue our ambitious growth targets consistently.”

Alina Roß, lead negotiator for IG Metall in Lower Saxony and Saxony-Anhalt, described the job security agreement as “the central component of the deal.” “In light of shifting investment decisions and volatile markets, employees need clear and reliable prospects. This agreement provides exactly that—reliability for the workforce and the site as a whole,” Roß said. “PowerCo is a key part of the industrial value chain and a central piece of the electromobility puzzle. With in-house battery cell production, technological expertise is consolidated at the site, and industrial sovereignty is strengthened.”

manager-magazin.de, ndr.de, igmetall.de (all in German)