Volkswagen reaches agreement to preserve German manufacturing facilities

Volkswagen has reached an agreement with the IG Metall trade union to avoid plant closures and immediate layoffs in Germany. The deal includes cutting over 35,000 jobs in a “socially responsible” manner by 2030 to save €15 billion. No site will be closed, and no one will be laid off due to operational reasons. The agreement secures the company’s wage agreement for the long term and includes solutions such as offered early retirement. The union’s works council chief, Daniela Cavallo, described the deal as “rock-solid” and a “good, socially acceptable solution”. The agreement also includes a reduction in production capacity, no new bonus payments, and changes to apprenticeships. Volkswagen’s CEO, Oliver Blume, stated that the agreement is “an important signal for the future viability of the Volkswagen brand”. The German government, led by Chancellor Olaf Scholz, also welcomed the announcement. The agreement comes after a series of warning strikes and intense negotiations, with the union and company seeking to balance job security with the need for cost savings.