Volkswagen and unions reach deal for 35,000 job cuts to save 15 billion euros annually

From Investing.com: 2024-12-21 16:31:33

Volkswagen announces major changes in German operations, including 35,000 future job cuts and capacity reductions to avoid mass strikes. No site closures or immediate layoffs. Shares rose 2.4% after the deal, aiming to compete with Chinese rivals and address sluggish demand. VW expects 15 billion euros in annual savings.

Negotiations between Volkswagen and unions result in a deal to save 15 billion euros annually, with no immediate site closures. Production to shift to Mexico, Wolfsburg plant assembly lines cut in half. No layoffs or site closures planned. Top shareholder Porsche SE welcomes the deal as crucial for VW’s competitiveness.

Volkswagen’s agreement with unions sees 35,000 future job cuts without compulsory redundancies to address overcapacity. IG Metall negotiator says cuts are part of a socially responsible solution. Analysts believe more job cuts may be needed to address stagnation in the European market. Unions may benefit more from the deal than VW.

Volkswagen’s negotiations with unions lead to a deal to save costs and improve competitiveness. Talks took place in a no-frills hotel in Hanover, with breaks for coffee and fruit late into the night. Crisis at VW comes amidst political uncertainty in Germany and wider turmoil in the auto industry. Chancellor urges VW to keep all factories open.

Germany’s largest economy faces slow growth as a campaign issue ahead of a snap election. Chancellor Scholz welcomes the socially acceptable solution with VW, ensuring a good future for the company and its employees. Economist believes further adjustments may be needed due to competitive price pressure. Former VW bosses failed in their attempts to make changes as unions stood firm.

IG Metall’s threat of strikes was a powerful bargaining chip in negotiations with Volkswagen. UBS estimates each strike day may have cost VW up to 100 million euros in revenue and 20 million in operating profit. ($1 = 0.9579 euros)



Read more at Investing.com: VW reaches union deal to cut 35,000 German jobs after gruelling talks By Reuters