Volkswagen (VW) has reached a deal with unions to cut around 35,000 jobs in Germany, as part of efforts to reduce costs and increase competitiveness in the European market. The agreement was hailed by union leaders as a “Christmas miracle” after 70 hours of grueling negotiations.
The deal includes sharp capacity reductions and would allow VW to save 15 billion euros ($15.6 billion) annually. Production at several German plants, including the Dresden plant, will be shut down by the end of 2025. However, no immediate site closures or layoffs are expected.
VW’s chief executive, Oliver Blume, said the deal sets a decisive course for the company’s future in terms of costs, capacities, and structures. The union, IG Metall, welcomed the agreement, saying it would keep factories open and secure wage agreements for its members.
The crisis at VW has hit at a time of uncertainty and political upheaval in Germany, with Chancellor Olaf Scholz urging the company to keep all its factories open. Analysts say the deal may provide relief to investors, who have lost 23% this year.
However, some experts warn that the cuts may not be enough to address the current stagnation in the European market. Matthias Schmidt, a European auto markets analyst, said the unions could have demanded more from VW, but this agreement is “probably the best they could have realistically hoped for.”
Source: https://www.reuters.com/business/autos-transportation/rapprochement-between-volkswagen-union-wage-talks-sources-say-2024-12-20