The German union IG Metall said Friday it had reached a deal with Volkswagen to avoid involuntary redundancies and plant closures at the carmaker’s production sites in Germany until 2030.
Union representatives have been negotiating for weeks with the company — Europe’s largest automarker — over cost-cutting measures, including plans to close three plants, cut wages and slash jobs.
“We have managed to find a solution for workers at Volkswagen plants that promises jobs, protects products in factories and at the same time allows for long-term investments,” union negotiator Thorsten Gröger said in a statement.
“No plant will be closed, no one will be laid off for operational reasons and our corporate wage agreement will be guaranteed in the long term,” said Volkssalaryn works council president Daniela Cavallo.
Volkswagen said the deal also included provisions to cut more than 35,000 jobs in a “socially responsible” way by 2030.
Friday’s breakthrough in the northern city of Hanover came after marathon negotiations that lasted 70 hours, the longest in the automaker’s history.
Gröger said that under the agreement, he will have job security until 2030, but he will have to give up wage increases in the coming years and bonuses will be reduced.
He said the package “includes painful employee contributions, but at the same time creates benefits for the workforce. “
VW’s proposed factory closures, pay cuts and layoffs had already led thousands of people across the country to go on strike twice in the last month.
The union had threatened further walkouts in the new year if a deal was not struck before the Christmas holidays.
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“After long and intensive negotiations, the agreement is an important signal for the future viability of the Volkswagen brand,” group CEO Oliver Blume said in a statement.
The company said the agreement with the union would save 15 billion euros ($15. 6 billion) a year in the medium term. It will also increase the technical capacity of its German plants with 700,000 vehicles.
“We had three priorities in the negotiations: reducing excess capacity at the German sites, reducing labour costs and reducing development costs to a competitive level,” said VW brand boss Thomas Schäfer. “We have achieved viable solutions for all three issues.”
The company cited China’s festival, weak demand in Europe and slower-than-expected adoption of electric vehicles as reasons to cut costs.
nm/kb (AFP, Reuters, dpa)