In a significant agreement reached with the IG Metall trade union, Volkswagen (VW) has effectively averted plant closures in Germany, securing job stability for its workforce amid plans to cut over 35,000 positions by 2030. The deal, finalized after protracted negotiations that began in September, ensures that no immediate compulsory redundancies will take place, while also enabling VW to transform its operations and save approximately €15 billion (£12.4 billion) in costs. This arrangement comes as the largest car manufacturer in Germany faced declining demand, particularly from the Chinese market, raising concerns about potential plant shutdowns for the first time in history.
Volkswagen Strikes Deal to Save Jobs and Avoid Plant Closures
Volkswagen Strikes Deal to Save Jobs and Avoid Plant Closures
Volkswagen has successfully negotiated with the IG Metall union to preserve its German plants while restructuring its workforce.
The compromise includes the suspension of a 5% wage increase planned for 2025 and 2026, along with a substantial reduction in annual apprenticeships from 1,400 to 600 starting in 2026. VW's management indicated that this strategy aims to facilitate a smoother transition during the company's upcoming transformation. Daniela Cavallo, the works council head, expressed relief that their negotiations led to a "rock-solid solution" amidst tough economic conditions. With the deal's approval, VW will also explore shifting some production to Mexico and weighing options for its facilities in Dresden and Osnabrueck. Furthermore, a collective wave of warning strikes by around 100,000 employees underlined the urgency of reaching an agreement prior to the holiday season. German Chancellor Olaf Scholz hailed the resolution as a socially responsible compromise during challenging times for the automotive industry.
