[Volkswagen Announces Sweeping Changes to German Operations, Averts Strike with Union Deal
Volkswagen announced a new deal with union representatives to avert mass strikes, which would have been the largest in the company’s 87-year history. The agreement includes over 35,000 future job cuts and capacity reductions, but no immediate site closures, layoffs, or wage cuts. The deal comes after 70 hours of grueling negotiations, the longest in the company’s history.
The agreement was hailed as a “Christmas miracle” by union leaders, who had been protesting plans to cut wages, reduce capacity, and potentially shut German plants for the first time. The deal will save the company 15 billion euros annually in the medium term and has no significant impact on its 2024 guidance. Some production will be shifted to Mexico.
Under the agreement, the Dresden plant will shut down by the end of 2025, and the Osnabrueck site will be repurposed. The deal also includes a 5% wage increase, which will be suspended, and no significant changes to the company’s wage agreement.
“We are happy to have achieved a rock-solid solution under difficult economic conditions,” said works council chief Daniela Cavallo. “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.”
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