Volkswagen’s deal with workers’ representatives contemplates 35,000 jobs in future Germany-“is good news”, said the company CEO on Sunday.
It is one of the biggest adjustments planned in Volkswagen’s German operations capacity reductions under the last-minute agreement between the manufacturer’s workers.
The agreement followed months of strife with employees, arising from the car manufacturer’s indication for the very first time in its 87-year history that it might close plants in Germany, accompanied by a plan of wage cuts, that led more than 100,000 Volkswagen workers to strike at the company’s German plants early December.
“This agreement is good news for Volkswagen,” Volkswagen Group CEO Oliver Blume told Frankfurter Allgemeine in an interview on Sunday.
“This package of measures sets the decisive course for the future,” he said before adding that the company would manufacture cars competitively by reducing the overcapacity.
“This underpins being an economic and reliable employer to long-term thousands of people,” he said. His remarks were a restatement of Volkswagen’s announcement from earlier this Friday.
The words propagated exactly as those of Volkswagen’s statement on Friday. “After extensive negotiation with [union] IG Metall and the works council, Volkswagen AG has reached an agreement on an agreement: Future of Volkswagen,” the company said.
“By ensuring that, the managing body and the works council would work accordingly on the long-term viability of Volkswagen AG,” added the statement.
It is also worth noting that the talks were conducted over a period exceeding 70 hours making it the longest negotiation session to be recorded in the company’s 87 years of existence, and union leaders categorically labelled the agreement a Christmas miracle.
Volkswagen proclaimed that the alliance deals with savings worth 15 billion euros each year in the future and did not foresee a big influence on its prospective guidance for 2024.
Though no closings are imminent, the company asserts that it is considering the possibilities associated with its plant in Dresden and the repurposing of the Osnabrück location, including searching for buyers. Some will be transferred to production in Mexico.
‘With no closures for any site, none will face operational layoffs and even long-term security will be there for our company wage agreement,’ said Works Council Chief Daniela Cavallo.
Meanwhile, Suddeutsche Zeitung reported on Sunday that close to 4,000 Volkswagen managers could face cuts in their income in the operation.
Since 2025 and 2026, the pay will be lessened by 10 percent from the present levels. The decrease would then recede for the coming years, which will last until 2030.
Since September, Volkswagen has been in discussion with unions regarding cost-cutting measures that should be adopted to counter the impact of the cheaper rival from China, weak demand in Europe, and reduced growth in electric vehicles compared to expectations.
In the month of October, the company comes forward with its announcement for the very first time to shut down at least three plants in Germany and downsize every remaining factory.
