VW deal with union entails 35,000 future job cuts, capacity reductions

By Al Mayadeen English
Source: News websites
20 Dec 2024 22:47
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Volkswagen and work unions agreed to 35,000 future job cuts to ensure the continuity of several sites and protect wages.

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The main Volkswagen factory is pictured during a strike of employees of Germany's largest carmaker VW in Wolfsburg, Germany, on December 9, 2024. (AP)

The German automaker giant Volkswagen (VW) announced major changes to its German operations, including more than 35,000 future job cuts and capacity reductions, following a last-minute deal between the carmaker and unions on Friday.

Union leaders said the deal was a "Christman miracle" after 70 hours of brutal negotiations, the longest in the company's history. The deal averted mass strikes across VW sites.

Measures sought out by VW aimed to enhance the company's standing and its chances of competing with Chinese-made electric vehicles, following feeble demand in Europe and slower-than-expected adoption of EVs, as the continent pushes for a green transition.

Around 100,000 workers staged two separate strikes in the past month to protest the administration's plans for wage cuts, reduced capacity, and shutting down plants.

"After long and intensive negotiations, the agreement is an important signal for the future viability of the Volkswagen brand," group CEO Oliver Blume said in a statement.

The deal will allow savings of 15 billion euros per year in the medium term, according to VW.

Meanwhile, works council chief Daniela Cavallo said that the deal will secure wage agreements for the long term.

"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," she revealed.

"With this triple deal, we have achieved a rock-solid solution under the most difficult economic conditions," she added.

The crisis at VW has emerged during a period of uncertainty and political turbulence in Europe's largest economy, compounded by broader challenges facing the region's automakers.

Reviving Germany's sluggish growth has become a key campaign issue ahead of February's snap election, with Chancellor Olaf Scholz, who is trailing in the polls, urging VW to keep all its factories operational.