Volkswagen and IG Metall strike agreement on Germany cost cuts

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Volkswagen and IG Metall strike agreement on Germany cost cuts


Following intensive negotiations between Volkswagen AG, IG Metall (German labour union) and the Works Council, a joint agreement entitled ‘Zukunft Volkswagen’ [Future Volkswagen] has been concluded, the company has announced.

In a statement, VW said it realigning production capacities at Volkswagen AG’s German locations and creating the conditions for a reduction in labour costs of €1.5 billion per year at the collectively agreed level with an agreement on the company wage settlement until 2030.

The short-term reduction in labour costs and the agreed structural measures through capacity reduction and a decrease in development costs will lead to cost savings of over €4 billion per year in the medium term, VW said.

In addition, a reduction in capacity of 734,000 units across the German plants is planned. This, the company said, ‘will enable Volkswagen AG to lay the foundation for important investments in future products through to 2030’. VW also said 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’.

There was also agreement on what was termed ‘socially responsible reduction of the workforce by more than 35,000 across Volkswagen’s German locations by 2030’. This includes a newly formulated job security plan through to 2030.

VW said the agreement will achieve sustainable cost savings for Volkswagen AG of more than €15 billion per year in the medium term. Of this, over €4 billion per year will come from the present negotiations on labour costs, structural and production measures and plant utilisation.

Labour costs alone will be reduced by €1.5 billion per year.

VW said a full and final assessment of the impact of these cost effects on the VW Group’s operating profit in 2025 and subsequent years will be made ‘in the coming weeks’. At this point in time, the company does not expect any significant impact on the outlook for the 2024 financial year.

The ‘Zukunft Volkswagen’ jointly declared goal is for the Volkswagen Passenger Cars brand, the core of Volkswagen AG, to become the technologically leading volume manufacturer globally by 2030.

VW said there is also job security for the workforce of Volkswagen AG at the collectively agreed level until the end of 2030, as agreed during the collective bargaining negotiations. ‘Zukunft Volkswagen’ also now ‘ensures commercially sustainable production at the German sites’. To this end, the company and Works Council have agreed on a socially responsible reduction in the workforce of more than 35,000 across Volkswagen’s German sites by 2030, alongside the structural production measures.



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