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The automaker agreed to keep its ten factories open in Germany and guarantee the employment of workers until the end of 2030.
By Melissa Eddy
Reporting from Berlin
Volkswagen, Germany’s largest automaker, reached an agreement with its union on Friday, ending a three-month standoff that had rattled the country and brought to light the extent of German industrial decline.
Under the deal, hammered out during more than 70 hours of talks at a hotel in the western city of Hanover, the company agreed to keep all 10 of its factories in Germany open and to guarantee workers’ jobs until the end of 2030. But during that time, the company will carry out a restructuring plan that will include the loss of more than 35,000 jobs through retirement and attrition.
In exchange, the union, IG Metall, which represents most of Volkswagen’s workers, withdrew its demand for a wage increase until 2031 and agreed to cuts in bonuses and reductions in production of hundreds of thousands of cars across several plants.
“No plants will be closed, no one will be laid off and our corporate salary agreement will be guaranteed in the long term,” said Daniela Cavallo, president of the Volkssalaryn works council, when commenting on the agreement.
At stake was not just wages but Volkswagen’s plans to solve the problem of too many workers and too few orders, amid slumping demand in Europe and abroad and increasing competition from Chinese automakers.
Volkswagen’s problems reflect Germany’s economic malaise. The country’s government forecasts a contraction of the economy in 2024, for the second year in a row. Economists expect a significant return to expansion in 2025.
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