After 70 hours of uninterrupted negotiations, Volkswagen has finally reached an agreement with the unions. Ig Metall has announced that it has finalized an agreement on a cost-cutting plan that will avoid forced layoffs in the factories and the closure of the German plants of the largest car manufacturer in Germany.
“We have managed to find a solution for the employees of the Volkswagen sites who secures jobs, safeguards the products and at the same time enables important future investments”, celebrates the German union, with its leaders speaking of ““Christmas miracle”.
“The agreement represents an important signal for future sustainability of the Volkswagen brand,” said the group’s CEO, Oliver Blume.
What does the agreement between Volkswagen and the unions include?
Agreement averts mass layoffs mandatory, but it imposes very painful choices on both parties that will translate into a maxi cost-cutting plan aimed at saving the group from the crisis by avoiding the closure of the factories.
The project includes: cut over 35 jobs in German plants by 2030 – or 29 percent of the total workforce of Europe's largest automotive industry, the flagship of German industry – through a “socially responsible reduction” voluntary exits and – to a large extent – unreplaced retirements.
“We have succeeded in finding a solution for the employees of the Volkswagen plants that secures jobs, preserves production in the factories and at the same time allows for significant future investments,” said union negotiator Thorsten Gröger.
“There will be no factory closures, economic layoffs are excluded,” assured Ig Metall, according to whom the management of the Wolfsburg-based company initially wanted to cut 55 jobs.
While avoiding factory closures, production will be reduced in five of them: An assembly line in Zwickau will be closed and, in future, converted to the sole production of Audi's electric Q4-etron model. The electric compact VW ID.3 and the Cupra Born will be moved to Wolfsburg, where the electric Golf will also be produced. The ID.4 will go to Emden, while the current Golf will instead be moved from Wolfsburg to Mexico.
The agreement also includes the waiving of a certain number of bonuses by employees. In exchange, the employment guarantee will be renewed until the end of 2030. Thanks to the agreement, the Wolfsburg group hopes to generate a total savings of “4 billion euros” in the medium term.
Scholz: “Positive and socially acceptable agreement”
German Chancellor Olaf Scholz speaks of agreement “positive and socially acceptable” which “guarantees a positive future for the group and its employees”.
