The leading European car manufacturer Volkswagen will cut more than 35,000 jobs in Germany by 2030 in order to reduce its costs, as part of an agreement sealed on Friday to try to save the group in crisis. This measure should prevent factory closures and layoffs.
Management and the union showed their relief at this compromise, which was concluded with forceps after three months of tense negotiations, punctuated by two strikes which brought the group's sites to a standstill.
The agreement provides for “a socially acceptable reduction in the workforce” of more than 35,000 people on the German sites of the Volkswagen brand by 2030, or 29% of its total workforce, the manufacturer announced.
These departures will not be forced, staff representatives stressed. Many retirements, in particular, will not be replaced.
“Guaranteed” jobs and “preserved” production
The formula found “guarantees jobs, preserves production in factories and at the same time allows significant future investments”, said Thorsten Gröger, negotiator for the automobile union.
“There will be no factory closure, economic layoffs are excluded,” he assured while this scenario was not excluded by the leading European manufacturer.
According to the unions, management initially demanded the elimination of 55,000 jobs. In exchange, employees agreed to waive a certain number of bonuses and reduce production capacity in several of the group's ten German factories, which will be reduced by more than 700,000 units.
Four billion saved
Thanks to this agreement, Volkswagen hopes to generate a total of four billion euros in savings in the medium term.
“We had three priorities: reducing overcapacity on German sites, reducing labor costs and bringing development costs to a competitive level,” explained Thomas Schäfer, boss of the group's flagship brand, VW, also the most in difficulty. “We have reached viable solutions on these three subjects,” he assured.
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A group in difficulty
The group, the flagship of German industry, caused a shock in September by announcing that it was preparing a drastic savings plan to restore its flagging competitiveness and was considering factory closures – a first in the history of Volkswagen.
CEO Oliver Blume continues to insist that the manufacturer's costs are too high and the profit margins of the historic VW brand, which represents a little more than half of sales, too low.
Volkswagen is also suffering from the global slowdown in car sales, Chinese competition, and battery models that are not attractive enough which are slowing down the momentum of its transition to electric.
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