The German union IG Metall said Friday it had reached a deal with Volkswagen to avoid involuntary redundancies and plant closures at the carmaker’s production sites in Germany until 2030.
Union representatives have been negotiating for weeks with the company — Europe’s largest automarker — over cost-cutting measures, including plans to close three plants, cut wages and slash jobs.
“We have succeeded in finding a solution for employees at Volkswagen sites that secures jobs, safeguards products in the plants and at the same time enables important future investments,” union negotiator Thorsten Gröger said in a statement.
“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,” said Volkswagen’s works council chief Daniela Cavallo.
Volkswagen said the deal also included provisions to cut more than 35,000 jobs in “socially responsible” ways by 2030.
Marathon talks
Friday’s breakthrough in the northern city of Hannover came after a marathon negotiations lasting 70 hours — the longest in the carmaker’s history.
Gröger said that under the agreement, workers will have job security until 2030 but will have to forego wage increases in the coming years and bonuses will be cut.
He said the package “includes painful contributions from employees, but at the same time creates prospects for the workforce.”
VW’s proposed plant closures, wage cuts and layoffs had already led to thousands of workers across the country going on strike twice in the past month.
The union had threatened further walkouts in the new year if a deal was not struck before the Christmas holidays.
What did Volkswagen say?
“After long and intensive negotiations, the agreement is an important signal for the future viability of the Volkswagen brand,” group CEO Oliver Blume said in a statement.
The company said the agreement with the union would allow savings of €15 billion ($15.6 billion) a year in the medium term. It will also reduce technical capacity at its German sites by 700,000 vehicles.
“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,” said VW brand boss Thomas Schäfer. “We have achieved viable solutions for all three issues.”
The company cited competition from China, sluggish demand in Europe and slower-than-expected adoption of electric cars as reasons why it needed to cut costs.
nm/kb (AFP, Reuters, dpa)