After an unprecedented marathon of negotiations, Europe’s largest car manufacturer Volkswagen and the IG Metall settled their collective bargaining dispute. After more than 70 hours of negotiations, both sides agreed on Friday that more than 35,000 jobs will be cut in Germany by 2030. The company announced that the capacity of the plants will be permanently reduced by 734,000 vehicles per year. The entire deal would save more than 15 billion euros per year in costs in the medium term; the reduction in labor costs alone would amount to 1.5 billion euros annually, explained the Wolfsburg-based group. VW currently employs around 130,000 men and women in Germany.
IG Metall chief negotiator Thorsten Gröger (55) said that a package had been put together “that includes painful contributions from the employees, but at the same time creates prospects for the workforce.” The employment security that has been in place for three decades will be put back into effect and is now valid until 2030. In return, employees will forego wage increases in the coming years and bonuses will be reduced. This also applies to management and the board.
The union and the employees had, among other things, demanded that no plants be closed. A sticking point in the negotiations was therefore the future of the plants in Dresden and Osnabrück. Vehicle production in Dresden will now end at the end of 2025. Around 300 people work there. Alternatives will be developed for the future of the plant, Volkswagen explained. “This also includes the possibility of Volkswagen AG participating in a third-party concept.”
The convertible version of the T-Roc is scheduled to be produced in Osnabrück until late summer 2027, which is longer than previously planned. Afterwards, options for another use of the location should be examined. The company says the plant should be sold. Production of the Golf will move from Wolfsburg to Mexico from 2027. Production in Zwickau will also be significantly reduced. In the future, only the electric Audi Q4 will be built there, and a complete production line is to be shut down.
“With the package of measures achieved, the company has set the course for its future in terms of costs, capacities and structures,” said VW boss Oliver Blume (56). VW brand boss Thomas Schäfer (54) added at a press conference in Berlin on Friday evening that the three goals had been achieved: to reduce labor costs, to bring development costs to a competitive level and to reduce excess capacity at the German locations.
VW works council boss Daniela Cavallo (49) said that a rock-solid solution had been achieved under the most difficult economic conditions. “Although there are collective bargaining concessions beyond monthly income, these are offset by the solidarity-based preservation of all locations including future prospects, new employment security until the end of 2030 and, last but not least, the certainty for the Board of Directors that changes at Volkswagen against the will of the workforce will fail are condemned.”
Both sides had repeatedly extended the fifth round of negotiations and struggled for a result for several nights. It was the longest round of negotiations in the car manufacturer’s history.
It was a tough struggle to find a solution to the conflict: the VW board – supported by the owner families Porsche and Piëch – had insisted on savings. Human resources manager Gunnar Kilian (49) in particular drove the negotiations forward. The company is in a massive crisis. VW is primarily burdened by massive overcapacity in Europe and weak Chinese business.