The car manufacturer Volkswagen and the union IG Metall recently reached a compromise that puts an end to a social conflict that threatened to trigger widespread strikes. This agreement comes after months of tensions and tough negotiations, leading to a reduction of 35,000 jobs by 2030 and a decrease in production capacity in Germany. In response to falling profits in China and an overproduction of vehicles, Volkswagen chose to consolidate its future operations while preserving existing positions until the end of the decade. This agreement also includes a reorganization of factories to optimize production based on models.
Volkswagen recently reached an agreement with the union IG Metall, ending a social conflict that had been ongoing for several months. The situation became tense as Volkswagen produced more cars than there were customers, largely compensated by profits in China. However, with declining sales in China, Volkswagen considered closing three factories in Germany. After intense negotiations, the agreement provides for the elimination of 35,000 jobs by 2030 and a reduction in production capacity of over 700,000 vehicles. Electric cars are not spared from these cuts.
A reorganization of departments, including technical development, is planned to maintain the company’s competitiveness. Some models will be relocated, and certain sites, such as the one in Zwickau, will be reduced to the production of a single model. Current employees are guaranteed job security until 2030, with some salary adjustments and flexible reduced hours funded by a special fund.
In conclusion, the negotiations have managed to find a solution to preserve sites and avoid forced layoffs while reducing Volkswagen’s labor costs for the future.
volkswagen finds a resolution to the social conflict
Volkswagen has recently reached a compromise with the union IG Metall to close a period of intense tensions. For several months, the automotive giant faced issues related to overproduction of vehicles, particularly due to declining demand in China. This situation led the company to consider closing three factories in Germany, which obviously raised major concerns among employees and unions. The social conflict threatened to escalate into massive strikes early next year, a scenario both parties wanted to avoid at all costs.
the details of the agreement between volkswagen and ig metall
The agreement ultimately reached provides for the elimination of 35,000 jobs by 2030 while ensuring job security for current employees until that date. The workforce reduction will primarily occur through attrition, with natural departures not being replaced. The discussions, which continued late into the night, also resulted in the reduction of production capacity in Germany by over 700,000 vehicles. Despite these measures, workers managed to secure significant guarantees, with the agreement including a fund to finance flexible work hour reductions.
reorganization of production and future consequences
Volkswagen has begun a strategic restructuring of its production to optimize its operations. The ID.3 and Cupra Born models will be moved from the Zwickau plant to the Wolfsburg plant, while the ID.4 will find its place in Emden. This reorganization involves that some smaller factories, such as the one in Dresden, will close or be reassigned, with consequences for local employment. Furthermore, traditionally assembled models in Germany, such as the Golf, will be transferred to Puebla, Mexico, for profitability reasons.
