Job cuts at VW, plants, salaries: This is how things continue at Volkswagen

Europe’s largest car manufacturer is now entering a time of austerity: Volkswagen wants to cut tens of thousands of jobs and produce hundreds of thousands fewer cars per year in the crisis in the car industry. Although the works will initially be preserved, some face an uncertain future. This is the compromise that Volkswagen and IG Metall agreed on after several days and nights of negotiations.

VW brand boss Thomas Schäfer spoke of tough decisions, but also important decisions for the future. IG Metall negotiator Thorsten Gröger praised that there was at least clarity for the employees and regions.

These are the central points of the agreement:

Volkswagen wants to cut more than 35,000 jobs in a socially responsible manner by 2030. Accordingly, around 4,000 jobs in technical development in Wolfsburg will be lost. In addition, the number of training positions offered annually will be reduced from 1,400 to 600 from 2026 as needed. VW is said to be saving 1.5 billion euros per year by reducing labor costs.

In the collective bargaining dispute, the IG Metall union fought for a new employment guarantee for around 130,000 employees. The group has now promised new job security until 2030. VW canceled the previous guarantee, which had excluded operational dismissals for more than 30 years, in September. If no follow-up regulation is agreed after the new guarantee expires in six years, VW would have to pay out one billion euros to the employees, the union said.

Contrary to what has been feared, there will initially be no complete plant closures. However, some locations, including the main plant in Wolfsburg, are facing serious changes. There the end for the combustion engine Golf is certain. The company announced that production of the Golf and Golf Variant models will be relocated to Puebla in Mexico from 2027.

In the future, the electric models ID.3 and the Cupra Born will be manufactured at the company headquarters. VW wants to secure the future of the location with the electric Golf and another model based on the future electric car architecture. The future also seems clearer for the plants in Emden and Zwickau, which have already converted to electric cars, with models from the ID series and electric cars from Audi.

The situation is different for the locations in Osnabrück and Dresden that were recently classified as endangered. In Osnabrück, production of the T-Roc convertible is to be extended until late summer 2027. In addition, the prospects for the last 2,300 employees are unclear. The union wants to develop economic future prospects for the location. The company said that options for other uses were being examined.

According to VW, vehicle production in the Transparent Factory in Dresden will end at the end of 2025. The company is working on alternative options, it said. This also includes the possibility of participating in a third-party concept. IG Metall emphasized that Volkswagen would continue to be present at the site with its own activities in the future.

When it comes to pay, there will be a zero round for VW employees. Similar to the degree in the metal and electrical industry, a salary increase of five percent would flow into a fund in two stages and not into the employees’ accounts. This fund will, for example, be used to finance flexible reductions in working hours for some employees. The union and works council presented this concept in November – the car manufacturer publicly rejected it, IG Metall said.

Both sides also agreed to revise the pay system, which is now decades old. The analysis will begin next year, with implementation not until 2027. From then on, future collective bargaining rounds could also ensure new wage increases at VW before 2030.