Posted on 24 Dec 2024
German carmaker Volkswagen Group and worker unions have reached an agreement that avoids plant closures, mass layoffs and long-term cuts to the collective agreement, Kallanish Power Materials reports.
Following a “marathon of negotiations” lasting over 70 hours, the IG Metall union told workers a “good compromise” was reached. The group is now calling on politicians to take responsibility and “immediately ensure framework and competitive conditions for the industry and the ramp-up of electromobility in order to create a long-term perspective for employees.”
“We have fought for a rock-solid solution under the most difficult economic conditions,” says Daniela Cavallo, chair of the General Works Council of Volkswagen AG.
The agreement reached between management and workers creates conditions for the Volkswagen Passenger Cars brand to achieve the return-on-sales target in the medium term and become the “technology leader of the world’s volume manufacturers” by 2030.
It will enable cost savings of over €15 billion ($15.6 billion) per year, of which €4 billion will come from labour costs, structural and production measures and plant utilisation negotiations.
The group will reduce production capacity by 734,000 units/year across its German plants and cut workforce by more than 35,000 jobs by 2030. Volkswagen says labour costs will be reduced by €1.5 billion per year by 2030.
“Following the long and intensive negotiations, the agreement is an important signal for the future viability of the Volkswagen brand, Volkswagen Commercial Vehicles and the component plants,” comments VW Group ceo Oliver Blume. “With the package of measures that has been agreed, the company has set a decisive course for its future in terms of costs, capacities and structures. We are now back in a position to successfully shape our own destiny.”
As part of the plans, production at the Wolfsburg plant will be reduced from four to two assembly lines, focusing on the ID.2 and CUPRA Born BEVs. The Golf and Golf Estate models will be relocated to Puebla in Mexico from 2027. In future, the facility will see two new BEV additions – the Electric Golf and another model on the SSP architecture.
The Emden plant will continue to produce the ID.7 saloon, ID.7 Tourer and the ID.4. Zwickau will remain a production location for the Audi Q4 e-tron and Audi Q4 e-tron Sportback, running a single line from 2027. New business areas are to be developed at the site to ensure a circular economy, though details haven’t been disclosed.
At Dresden, vehicle production at the so-called Transparent Factory will be discontinued at the end of 2025. The group is working on alternative options for the site.
In Hanover, production for the ID. Buzz and the Multivan will continue, though measures have been agreed to reduce factory costs. Meanwhile, the group’s components sites across Germany will be retained but cost-cutting measures will be put in place.
“We have set ourselves three priorities for the future of the Volkswagen brand: Reduce overcapacity in Germany, reduce labour costs and achieve competitive development costs,” notes Thomas Schäfer, ceo of the Volkswagen Passenger Cars brand. “We are in a position to largely close the gap in our performance programme.”
IG Metall says that Volkswagen’s situation, one of the most challenging in its corporate history, was brought by “past failures, the urgent need to invest in technological change, as well as uncertain political conditions and an unsettling political debate.”
The automotive industry has been under massive pressure in recent months, with increased competition and protectionism, and diminishing demand and returns.
Source:Kallanish Power Materials
