Volkswagen to cut more than 35,000 jobs in Germany by 2030

Published December 20,2024

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Marathon talks between Volkswagen and labour representatives about cost-cuttings measures on the carmaker resulted in a breakthrough on Friday, with either side portraying the deal as a win regardless that tens of hundreds of jobs will finally be shed.

While the IG Metall union mentioned that the mass involuntary lay-offs and plant closures feared by staff have been averted, Volkswagen mentioned its nonetheless plans to get rid of greater than 35,000 jobs in a “socially responsible” method by 2030 with the intention to regain its edge.

“We had three priorities in the negotiations: reducing excess capacity at the German sites, reducing labour costs and reducing development costs to a competitive level,” mentioned VW model boss Thomas Schäfer. “We have achieved viable solutions for all three issues.”

The carmaker will scale back technical capability at its German websites by over 700,000 automobiles. “These are tough decisions, but also important decisions for the future,” he mentioned.

IG Metall negotiator Thorsten Gröger acknowledged that a few of the compromises agreed to have been “painful,” together with the elimination of tens of hundreds of positions over a interval of a number of years, however that nonetheless the worst outcomes had been prevented. That included 10% across-the-board wage cuts for the German workforce.

Volkswagen’s works council head Daniela Cavallo forged the deal in a constructive mild: “No site will be closed, no one will be laid off for operational reasons and our company collective agreement will be secured in the long term.”

According to her, the deal struck with administration consists of job safety till the tip of 2030, though some collective bargaining concessions have been made when it got here to compensation.

The negotiations over pay and job safety have been happening on and off for weeks. The newest spherical started on Monday at a resort within the northern metropolis of Hanover and lasted greater than 70 hours.

According to IG Metall, the powerful negotiations have been the longest in Volkswagen’s historical past.

VW executives say that top labour prices in Germany are contributing to disappointing monetary outcomes at Europe’s largest carmaker, exacerbated by stiff competitors in China and struggles with shifting to electrical automobiles.

According to firm executives, larger revenue margins are wanted to maintain the core VW model aggressive and fund mandatory investments.

As many as three of the ten factories in Germany had been threatened with closure when negotiations started in September.

To put strain on the corporate, IG Metall staged two days of manufacturing unit strikes in December. According to the union, round 100,000 staff at 9 places took half in each strikes. It promised to stage even lengthier strikes within the new yr if a deal was not struck earlier than the Christmas holidays.