In the end the agreement was reached between Volkswagen and the union Ig Metall which will avoid the closure of German factories and forced layoffs of staff. The price to pay? 35 thousand exits by 2030 and reductions in production capacity.
The agreement between Volkswagen and Ig Metall
The last agreement with the unions was stipulated in 1994 to suspend collective dismissals and then revoked last September. The company, whose primary objective is to reduce the costs of 17 billion over the next two years, he initially pushed for the cutting of 55 thousand jobs.
In the end it was decided to proceed with the reduction of production activities in five plants to ensure operational continuity. Specifically, the assembly line in Zwickau will be closed and converted exclusively to the production of the electric model Q4-etron by Audi. There ID.3 and the Cupra Born they will be transferred to Wolfsburg, together with the future one Electric golf. There ID.4 will find a home in Emden, while production of the traditional Golf will be moved to Mexico.
However, if on the one hand layoffs and plant closures in Germany were avoided, on the other hand there was a price to pay for all this. The plan, in fact, envisages radical changes for operations in Germany, above all the cut of 35,000 jobs (29% of the total workforce). This will happen through a “socially responsible reduction”, with voluntary exits and unreplaced retirements. In addition, reductions in the company’s production capacity are expected.
With the agreement signed, Volkswagen has averted the risk of prolonged strikes and demonstrations. The workers agreed to give up a portion of the bonuses in exchange for employment guarantee until 2030.
The German Chancellor Olaf Scholz judged the agreement as “positive and socially acceptable” which “guarantees a positive future for the group and its employees”. The agreement came after 70 hours of exhausting negotiations: “We managed to find a solution for employees at Volkswagen sites that guarantees jobs, safeguards products and at the same time allows important future investments,” the union declared. “The agreement represents an important signal for the future sustainability of the Volkswagen brand,” he said Oliver BlumeCEO of the group.
The company is reviewing its production strategy, carefully evaluating the options for the plant Dresden and the reuse of the plant Osnabruck. In parallel, measures have been put in place that will generate annual savings of 15 billion euros starting from the medium term, without impacting the results expected for 2024. “No sites will be closed, no one will be fired and our company wage agreement will be guaranteed in the long term,” said the Italian-German Daniela Cavallopresident of the works council.
The Volkswagen crisis
From around September 100,000 workers they had participated in two separate strikes. Second Patrick Hummelof Ubs, the strikes, if prolonged, could have caused the group to lose up to 100 million euros a day.
The company’s problems are linked to the slowdown of Chinese marketwhose profits managed to cover the poor results achieved in Europe, in addition to theelectric carwith the growth of Chinese technology and the lack of a convincing model produced by Volkswagen.
