Union reaches agreement with Volkswagen to avoid plant closures

This article was originally published in German

After days of negotiations which looked like they had reached a stalemate, German workers union IG Metall has reached a deal to avoid Volkswagen plant closures as well as redundancies and wage cuts.

After more than 70 hours of marathon negotiations, the IG Metall workers union has reached an agreement with the management of car manufacturer Volkswagen.

In a press release, IG Metall wrote that the agreement would enable sustainable investment in the future of the automotive manufacturer while at the same time creating prospects for its workforce and their families.

All 10 of the company’s manufacturing plants in Germany will now remain open, according to the deal, while redundancies and wage cuts were also avoided.

Redundancies have been ruled out until 2030.

The two parties have also agreed to revise the salary structure, which is decades old.

In previous weeks, around 100,000 Volkswagen employees protested against company management’s plan to cut wages. IG Metall now says that without such mass action, it would not have been possible to stop the company from implementing its drastic cost-cutting plans.

Daniela Cavallo, Chairwoman of the General and local Works Council of Volkswagen Group, commented: “No site will be closed down, nobody will be made redundant and our company wage agreement will be secured for the long term.”

“Although there are collective concessions beyond monthly income, these are offset by the solidarity-based preservation of all manufacturing plants, including future prospects, new job security until the end of 2030.” She also claimed the deal showed that any proposed changes at Volkswagen that were against the will of its workforce are doomed to failure.

Volkwagen had previously sought to lay off thousands of German employees, as well as close factories for the first time in the country while reducing pay by 10%. The company had also set a cost savings target of about €10bn.

The automotive giant employs around 120,000 workers in Germany. The Porsche-Piëch family is the majority owner of the German holding company Porsche SE, which in turn, is a controlling shareholder in Volkswagen Group.