Volkswagen has agreed a deal with the IG Metall trade union that will avoid further strikes, plant closures in Germany and immediate compulsory redundancies.
After intensive talks the two sides have, however, agreed to cut more than 35,000 jobs across the country in a “socially responsible manner” by 2030, in order to save some €15bn (£12.4bn). This will be achieved through early retirement and a variety of other schemes.
During the talks, from 2 December, about 100,000 workers joined short, so-called “warning strikes” at sites across Germany, in order to put pressure on the company’s management.
VW was considering closing up to three factories in Germany and had been calling on its workforce to accept a 10% pay cut.
At the time, the union was calling for a 7% increase.
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Union leaders hailed the deal. IG Metall’s works council chief Daniela Cavallo, said: “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.
“We have achieved a rock-solid solution under the most difficult economic conditions,” she added.
Under the agreement, a 5% wage increase that was previously agreed will also be suspended in 2025 and 2026.
The number of apprenticeships on offer each year in Germany will be reduced from 1,400 to 600 from 2026 too, and it will look at shifting some production to Mexico.
It is also looking at alternative options to closure for its Dresden and Osnabruck sites.
Oliver Blume, VW’s group chief executive, said in a statement that the agreement was “an important signal for the future viability of the Volkswagen brand”.
As with most European car manufacturers, Volkswagen has been under pressure from Chinese electric car makers.
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