Volkswagen Group has reached a wage deal for its 120,000 German workers that avoids plant closures and involuntary layoffs through 2030. The agreement is aimed at helping the company cope with declining demand in Europe, higher raw material costs, and increased competition from Chinese automakers.
The deal would save Volkswagen €1.5 billion annually in labor costs and €4 billion by slashing manufacturing capacity. However, it also includes provisions for over 35,000 jobs to be shed through early retirement and buyouts.
While the agreement avoids wholesale plant closures, some factories will still cease production, including one in Dresden at the end of next year. The company plans to repurpose the site and move its Golf model production from Wolfsburg to Mexico.
The new deal is seen as a major victory for employee representatives and the state of Lower Saxony, which have majority control over the Volkswagen board. Top executives hailed the agreement as “sustainable” and said it addresses the company’s three priorities: reducing overcapacity, labor costs, and development costs.
Source: https://apnews.com/article/volkswagen-wage-deal-germany-layoffs-9ad86b7d237ca6cd5c352b576ed41b4a