Huge car maker to cut over 35,000 jobs after ‘intensive negotiations’ over factory closures
A MAJOR car manufacturer is cutting more than 35,000 jobs after “intensive negotiations” over factory closures.
Volkswagen will cut the jobs by 2030 following discussions with unions – but will now not be closing any plants.
The ‘Future Volkswagen’ agreement was thrashed out between the IG Metall and the Works Council, as the car maker looks to cut labour costs by €1.5billion (£1.25billion) per year.
Marathon talks in Hannover lasted 70 hours – the longest in the car maker’s history – before a breakthrough was reached on Friday.
Friday’s breakthrough in the northern city of Hannover came after a marathon negotiations lasting 70 hours — the longest in the carmaker’s history.
The union had threatened further walkouts in the new year if a deal was not struck before the Christmas holidays.
Volkswagen described the measures agreed on as a “socially responsible reduction in the workforce”.
The firm will also reduce its capacity of 734,000 units across its German plants.
It said: “This will enable Volkswagen AG to lay the foundation for important investments in future products through to 2030.
“The structural realignment of the company at an operational and collective level will create the conditions for achieving the return-on-sales target for the Volkswagen Passenger Cars brand in the medium term.”
Union negotiator Thorsten Gröger said in a statement yesterday: “We have succeeded in finding a solution for employees at Volkswagen sites that secures jobs, safeguards products in the plants and at the same time enables important future investments.”
Volkswagen’s works council chief Daniela Cavallo: “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.”
VW brand boss Thomas Schäfer said: “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 company said the agreement with the union would allow savings of €15 billion ($15.6 billion) a year in the medium term. It will also reduce technical capacity at its German sites by 700,000 vehicles.
“We had three priorities in the negotiations: reducing excess capacity at the German sites, reducing labour costs and reducing development costs to a competitive level.
“We have achieved viable solutions for all three issues.”
The firm has cited competition from China, low demand in Europe and slower-than-expected adoption of e-cars as reasons why it needed to cut costs.
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