Volkswagen Group and IG Metall strike a Christmas-miracle deal to cut more than 35,000 jobs by 2030

After weeks of fraught talks, Volkswagen Group and the IG Metall union have finally reached an agreement that, in the words of union leaders, amounted to a “Christmas miracle”.

Background to the Volkswagen Group–IG Metall talks

Negotiations between Volkswagen Group and its workforce began in September. Since then, thousands of employees have downed tools in protest over pay cuts and threats to shut plants, stepping up the pressure on company management.

Now, following five negotiating rounds, more than 70 hours of discussions and two strikes (involving 100,000 workers), the two sides have at last come to a compromise:

“No factory will be closed, no one will be made redundant for operational reasons and our wage agreement will be guaranteed.”
Daniela Cavallo, head of the workers’ union

Even so, the German group has agreed with the union to cut more than 35,000 jobs at its German plants by 2030, using what it describes as a “socially responsible” approach (retirements, and so on).

This move will enable Volkswagen to save more than €15 billion.

What will change

Although 35,000 roles will be phased out over time, the unions secured a Volkswagen climbdown on removing the job-protection safeguard agreement (which will remain in place until 2030).

In return, they accepted the removal of several bonuses, a reduction in the number of apprentices offered permanent jobs, and a cut in installed capacity across five factories.

On that last point, Volkswagen will see its installed production capacity reduced by around 730,000 units. At the same time, it is committing to keep open and operating the three German plants it had initially intended to close-although significant changes will be required.

German factories: what happens next for Zwickau, Wolfsburg and Dresden

Zwickau

The Zwickau plant will continue to build the Audi Q4 e-tron and will also take on an automotive recycling project. Its installed capacity, however, is expected to fall sharply as production of the Volkswagen ID.3 and ID.4, as well as the CUPRA Born, is moved to Wolfsburg and Emden.

Wolfsburg

Wolfsburg-Volkswagen’s main German plant and its headquarters-is set to lose production of the Volkswagen Golf, which will be relocated to Mexico. However, in 2028 it will take on production of the new electric Golf, based on a platform being developed jointly with Rivian.

Dresden

Dresden, which also produces the ID.3, faces an uncertain future, with the end of its operations scheduled for next year. The Group says it is looking at “alternative options”, while insisting the factory will not be closed.

“An agreement reached in collective bargaining marks an important step on the path to making Volkswagen AG more competitive in Germany. We are truly grateful to our employees for their willingness to reach this agreement, which demonstrates our shared determination to tackle the challenges together. The real work begins now,” Arno Antlitz, Chief Financial Officer of Volkswagen Group, wrote on LinkedIn.

Source: Automotive News Europe