Volkswagen Cuts Deal With The Union, To Layoff 35,000 Jobs In Germany In Future

Volkswagen said that no immediate site closures or layoffs would take place and also backed away from its demand of 10 per cent wage cuts

The company has been struggling from weak demand in Europe and a lacklustre adoption of electric vehicles in the public.

Source : Volkswagen dealer

Volkswagen on Friday announced some major changes to the company’s operations in the home country. The automaker said that it will make more than 35,000 job cuts in the coming years and reduce capacity in its German operations.

The company managed to make a deal with the unions in order to avoid mass strikes, reported Reuters. Union leaders called the agreement a ‘Christmas miracle’ after engaing in 70 hours-long negotiations with the company. Volkswagen said that no immediate site closures or layoffs would take place and also backed away from its demand of 10 per cent wage cuts.

Notably, Volkswagen has been in conversation with union representatives since September regarding measures it needs to take to compete with its Chinese contenders. The company has been struggling from weak demand in Europe and a lacklustre adoption of electric vehicles in the public.

In the last month itself, about 100,000 workers have gone on two separate strikes, protesting against cost-cutting measures. This also marked the largest strikes seen in the company’s history.

Issuing a statement, Volkswagen CEO, Oliver Blume said, “With the package of measures that has been agreed, the company has set a decisive course for its future in terms of costs, capacities and structures. We are now back in a position to successfully shape our own destiny.”

The firm also said that this deal will help it save €15 billion annually in the medium term and stated that no major impact will be felt on its guidance for 2024. The automaker said that it is looking into options for its Dresden plant and repurposing its Osnabrueck site. Vehicle production will be closed at the plant by 2025 end. Daniela Cavallo, works council chief, noted, “No site will be closed, no one will be laid off for operational reasons and our company wage agreement will be secured for the long term.”