Volkswagen and the IG Metall union have reached an agreement that will prevent further strikes, plant closings in Germany, and immediate mandatory redundancies.
After extensive talks, the two parties have agreed to reduce more than 35,000 positions in the country “socially responsibly” by 2030 in order to save EUR15bn. Early retirement will help achieve this goal, as well as a number of other schemes.
In the course of the negotiations, around 100,000 workers took part in short ” Warning Strikes ” at various sites throughout Germany to exert pressure on the management.
VW was considering the closure of up to three German factories, and it had asked its employees to accept a pay cut of 10%.
The union demanded a 7% raise at the time.
Union leaders have welcomed the agreement. Daniela Cavallo is the chief of IG Metall’s works council. She said that no site would be closed and no one would be laid off due to operational reasons. Our company wage agreement for the long-term will also be secure.
She added, “We’ve achieved a rock solid solution in the most difficult of economic conditions.”
According to the agreement, an increase in wages of 5% that had been previously agreed upon will be suspended for 2025 and 2026.
From 2026, the number of apprenticeships offered in Germany each year will also be reduced to 600. It will also look to shift some production to Mexico.
The company is also considering alternative closure options for its Dresden and Osnabruck locations.
Oliver Blume said that in a press release, the agreement is “an important sign for the future viability” of the Volkswagen Brand.
Volkswagen, like most European automakers, has faced pressure from Chinese electric vehicle makers.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
Honda and Nissan announced a merger plan in response to the competition of Chinese firms such as BYD, NIO and BYD.
