Volkswagen have reached a deal with the IG Metall trade union which will avert plant closures in Germany and avoid immediate compulsory redundancies.
The two sides have, however, agreed to cut more than 35,000 jobs across the country in a "socially responsible manner" by 2030, in order to save some €15 billion ($15.55 billion).
Germany's largest carmaker had previously warned it might have to shutter plants in the country for the first time in a bid to cut costs. [Kindly read my post "Volkswagen Plan Mass Layoffs" published November 01, 2024].
After drawn-out negotiations which began in September, the union said on Friday that the two had "succeeded in finding a solution" that secures jobs and enables future investment.
While the deal will also see a reduction in production capacity across its plants, it was celebrated by union leaders.
"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", said IG Metall's works council chief Daniela Cavallo.
"We have achieved a rock-solid solution under the most difficult economic conditions", she added.
The 35,000 job cuts by 2030 are expected to be found through different solutions such as offered early retirement. Under the agreement, a 5% wage increase that was previously agreed will also be suspended in 2025 and 2026.
Oliver Blume, VW's group chief executive, said in a statement that the agreement was "an important signal for the future viability of the Volkswagen brand". Factory closures in Germany would have been unprecedented in the manufacturer's history.
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