Volkswagen Autoeuropa will suspend production for an extended period in 2026, for a total of around 70 additional days to the usual technical shutdowns, as part of a profound restructuring process at the Palmela factory. The decision raises doubts about the future of the unit, but the available information points to a scenario of industrial transformation and not closure.
According to the ECO news portal, the administration presented to the Workers’ Committee a production calendar for 2026 that foresees significant stops, associated with the adaptation of the factory to new models, the electrification of lines and investments linked to decarbonization. Workers have already accepted the appeal to lay-off as an instrument to get through these periods.
Unusual calendar
These extraordinary stoppages total around 70 days, in addition to the normal interruptions that Autoeuropa carries out every year for maintenance. This year, for example, the factory suspends production from December 19th until January 12th, although with some shifts operating on the weekends.
When the plan for 2026 was presented, the company put several legal tools on the table, including the temporary closure of activity, lay-off and different timetables. The Workers’ Committee defended the maintenance of the current model of organization of working time, as well as the preservation of income.
The initial proposals were considered penalizing, which led to additional negotiations. According to the same source, the lay-offwith a reinforced commitment from the company to pay salaries. The legislation provides that Social Security will support 46.6% of the remuneration, leaving the worker with a direct loss of 33%.
In the pre-agreement reached, Autoeuropa undertakes to guarantee 28.4% of the salary and shift allowance, with the remaining 25% being compensated through down days, also paid by the company. The news portal explains that this solution had already been applied in 2024, although then with a greater financial effort on the part of the company.
Investment and industrial transition
The prolonged stoppage is directly linked to the factory’s preparation for new models. According to the same source, Palmela will begin a transition phase with the production of the new hybrid T-Roc, maintaining the assembly of the combustion version as a global exclusive before moving to a fully electric model.
This process will culminate with the ID.Every1, a four-seater electric vehicle, scheduled to enter the market in 2027 and with a reference price of 20,000 euros. The same source states that the stops will serve to adapt the assembly line to this new generation of vehicles.
Decarbonization and community support
Another central axis of the investment is the construction of a new painting unit, which will make it possible to replace the use of natural gas in the ovens with electrical energy. It should be noted that this option led Autoeuropa to abandon a PRR consortium, due to incompatibility with environmental rules.
As part of the decarbonization plan, the factory will receive 30 million euros in community support, aimed at leveraging a global investment of around 300 million. The company fits this process into the Volkswagen Group’s Zero Impact Factory strategy, which foresees a reduction of around 85% in CO2 emissions.
Work, salaries and commitments
The Workers’ Committee emphasizes that “there is no justification for reducing shifts, teams or workers”, arguing that they are all essential in a phase of investment and growth, quotes the . There is still no agreement regarding salary increases, with a proposal of 15% on the table, with a minimum of 150 euros.
Despite this, there are relevant prior understandings: there will be no layoffs in 2026, several days of non-production have been set and it has been agreed to increase the company’s contributions to the pension fund. The negotiated points will still have to be validated in plenary, before becoming definitive.
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