New agreement seeks savings of 15 billion euros annually, according to the automaker
After an agreement between Volkswagen and unions on Friday (Dec 20, 2024), with the purpose of avoiding strikes, it was decided to cut more than 35,000 future jobs and reduce capacity in the automaker’s operations in .
There were more than 70 hours of negotiations, the longest in Volkswagen’s history, the agreement was seen as a “Christmas miracle”according to CNNas it was defined that there would be no immediate closures of units, salary cuts or layoffs.
Since September this year, the automaker has been negotiating with union representatives about measures that, according to Volkswagen, are essential to compete with Chinese rivals, who offer cheaper cars, as well as the slow adoption of electric vehicles and weak demand in Europe. .
Two strikes involving around 100,000 workers were recently held against possible pay cuts, German factory closures and capacity reductions. Oliver Blume, CEO of the group, stated that “after long and intense negotiations, the agreement is an important signal for the future viability of the Volkswagen brand”.
The automaker announced that it continues to look for alternatives for its Dresden factory and relocating the Osnabrueck factory. Volkswagen also explained that a portion of production will be transferred to Mexico. The cuts of 35,000 jobs are expected to occur by 2030. According to the automaker, it said that the agreement attempts to achieve savings of 15 billion euros annually. It is also planned to cut production capacity by 100,000 vehicles, according to Thomas Schaefer, the company’s executive president.
