Summary
- Volkswagen and IG Metall Union reached a compromise after a labor dispute
- Volkswagen agreed to cut 35,000 jobs by 2030 and reduce production capacity in Germany by over 700,000 vehicles
- The agreement includes reducing annual labor costs by €1.5 billion by 2030 and additional savings measures
- Volkswagen plans to eliminate redundancies through attrition, cutting bonuses, and profit-sharing
- Production shifts were agreed upon, moving models like the ID.3 and Cupra Born from Zwickau to Wolfsburg
Article
In a recent labor dispute between Volkswagen and the IG Metall Union, both parties have reached a compromise after months of tension. Volkswagen has been facing challenges due to overproduction and declining profits from its operations in China. To address this, the company proposed closing three factories in Germany, sparking concerns of widespread strikes. However, the two sides have now agreed to cut 35,000 jobs by 2030 and reduce production capacity in Germany by over 700,000 vehicles. These cuts will also include reductions in the production of electric cars.
Volkswagen stated that these measures are aimed at positioning the company competitively for the future. The agreement with the union includes a reduction in annual labor costs by €1.5 billion by 2030, along with additional savings from manufacturing and development cost reductions. The company plans to eliminate redundancies through attrition, with current employees guaranteed jobs until 2030. In addition to job cuts, there will be reductions in bonuses and profit sharing. The compromise also includes a “Future Fund” proposed by the union, which will be used to finance flexible reductions in working hours.
The restructuring at Volkswagen will result in job cuts in the Technical Development department, with around 4,000 jobs expected to be eliminated by 2030. Production shifts between factories have been agreed upon, with certain models being transferred to different locations. The agreement also includes the closure of smaller locations such as the Glass Factory in Dresden and the sale of the Osnabrück plant. However, larger components plants have received commitments for electric mobility components, ensuring their security.
Both sides, Volkswagen and the IG Metall Union, have claimed victory in the agreement. Volkswagen’s brand chief praised the results achieved in reducing overcapacity, lowering labor costs, and achieving competitive development costs. The Works Council chair emphasized the long-term job security and retention of all sites with future prospects. The deal is seen as a breakthrough for CEO Oliver Blume, allowing the company to move forward with critical planning rounds. The future viability and profitability of Volkswagen will depend on the success of these restructuring efforts.
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