Volkswagen has scrapped an agreement on protecting jobs in Germany that has been in place for three decades.
Europe’s largest carmaker said it had officially notified unions about the deal’s termination, the current version of which guaranteed jobs at German plants until 2029. Jobs would still be protected until the end of June in 2025.
The company, whose brands include Skoda, Audi, Seat and Porsche, said it needed to end the agreement to guarantee it would remain competitive as the market reoriented around electric vehicles.
It is thought to be struggling to compete with the likes of Chinese owned BYD Autos and US-owned Tesla in the market for new electric cars.
Manufacturing news
The moves are meant to “reduce costs in Germany to a competitive level in order to invest in new technologies and new products from our own resources,” VW’s human resources chief Gunnar Kilian said in a statement.
It called for talks with employee representatives to secure the “long-term competitiveness” of Volkswagen, whose brands range from Porsche and Audi to Skoda and Seat.
Daniela Cavallo, chairwoman of VW’s powerful works council and a member of the IG Metall union, vowed to put up “fierce resistance to this historic attack on our jobs. With us, there will be no layoffs”.
The auto giant employs 300,000 in Germany alone.
VW had already flagged earlier that a series of agreements with employee representatives would be axed and mooted that there some manufacturing sites in Germany may close. The firm reportedly believes one large vehicle plant and one component factory in the country to be obsolete
Thousands of workers protested at the group’s Wolfsburg headquarters last week as executives sought to justify the plans.
Cutbacks at VW are more difficult to achieve than at other companies because of the way the company is structured. Half the seats on the company’s supervisory board are held by workers’ representatives, and the German state of Lower Saxony – which owns a 20% stake – often chooses to side with trade union bodies.
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