In brief
The agreement secures the future of jobs while planning to cut 35,000 positions by 2030 to save €15bn.
Volkswagen (VW) has successfully negotiated with the IG Metall trade union to keep its German plants open, avoiding immediate job losses. This deal comes after intense discussions beginning in September, as VW had contemplated closing up to three factories to manage rising costs. The agreement ensures that no plant will be shuttered and that no employees will be laid off for operational reasons in the near term. Although it entails reducing 35,000 jobs by 2030 through methods like early retirement, union leaders are optimistic about securing job stability and encouraging future investment.VW will also pause a previously agreed 5% wage increase for 2025 and 2026 to support company transformation efforts. Notably, the number of apprenticeships will drop from 1,400 to 600 annually starting in 2026, and there are discussions about shifting some production activities to Mexico. This decision comes amidst increasing competition from Chinese car brands and a decline in car demand in China, previously one of VW's most profitable markets.The negotiations were underscored by labor actions, including "warning strikes" from around 100,000 workers nationwide, aimed at pressuring management. German Chancellor Olaf Scholz praised the agreement as a "good, socially acceptable solution," reinforcing VW’s intention to maintain its presence in Germany amid challenging economic conditions.
