After three months of tough negotiations and a prolonged union conflict, the Volkswagen Group it avoided the biggest crisis in its 87 years of existence.
The parent company reached an agreement with the unions that will prevent the closure of factories in Germanyas initially planned, but will involve a loss of 35,000 jobs by 2030at a rate of 7,000 workers per year. This will allow Volkswagen, which employs more than 300,000 people in Germany, to save around €1.5 billion annually in labor costs.
In addition, The company will reduce the bonuses of up to 4,000 managers by 10% in the next two years. The reduction will also be maintained for the following three years, until 2029, and the bonuses will decrease by 8%, 6% and 5%, respectively.
Volkswagen moves forward with job cuts plan
In Wolfsburg, the main plant in Germany, the models will be stopped Golf and Golf Variant.
Starting in 2027, the production of one of Volkswagen’s most legendary models will move to its plant in Puebla, in Mexico, in order to reduce costs. They estimate that 4,000 jobs will be cut in this factory, which will continue manufacturing the ID.3 and Cupra.
The plan includes other changes in order to cut costs: the Zwickau plant will focus exclusively on the production of the Audi Q4 e-tron and the Audi Q4 e-tron Sportback, closing one assembly line; The Dresden factory will be dedicated to “alternative” uses to car manufacturing from 2025 and the Osnabrück factory will stop producing the T-Roc Cabrio in 2027 and will seek external investors for the facilities.
The conflict between the Volkswagen automaker and the union that represents workers in Germany came to a head in early December.
The forceful measures began to be applied a few weeks ago, when the president of the group’s works council, Daniela Cavallo, declared that “the board wants to close at least three VW plants in Germany. It also aims to reduce the size of all remaining plants in the country,”
The plan, presented by the management of the car manufacturer, iincluded a 10% pay cut for all employees and the transfer abroad of numerous activities of the group, currently in Germany, indicated the president of the works council in a statement.
The conflict stage caused million-dollar losses to the automaker, which is the largest automobile manufacturer in Europe. According to specialist estimates, two hours of production interruption at its main plant in Wolfsburg can cause losses between 400 and 600 cars a day.
These figures not only represent a direct economic loss, but also affect Volkswagen’s image and position in the market.
The strike coincided with the resumption of negotiations for the revision of the collective agreement
Volkswagen CEO Oliver Blume addressed 20,000 Volkswagen workers at its headquarters in Wolfsburg to explain the need to apply wage cuts and close factories, but his explanations fell on deaf ears and he was booed.
The manager confronted workers in a heated meeting in which he tried to justify aggressive staff and salary reductions, as the automaker aims to reduce costs by 10 billion euros amid strong competition from China, the falling global sales and increasing production costs.
The company and the unions had expressed their interest, at the beginning of the fifth round of collective agreement negotiations in Germany, in “not letting any more time pass” and reaching an agreement before Christmas, as finally happened.
Source: Ambito
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