After all, Volkswagen does not have to close factories in Germany. The automaker has reached an agreement with its union IG Metall that will keep all 10 of the automaker’s factories in its home country open. The automaker also guarantees jobs for its employees until the end of 2030.
According to The New York Timesthe union agreed with the automaker to withdraw its request for a pay increase. It won’t be asked again until 2031. The new agreement comes after a months-long battle over the future of the brand’s operations in Germany, despite declining sales and demand.
“No branch will be closed, no one will be laid off and our wage agreement will be secured for the long term,” Daniela Cavallo, head of the Volkswagen works council, said in a statement.
However, Volkswagen has also announced that it wants to cut 35,000 jobs Coach. It currently has around 120,000 employees in Germany and will look to reduce its workforce over the next five years with early retirement packages and other voluntary measures to reduce costs. Although VW will keep all its factories open, it will repurpose two of them.
Last month, Volkswagen CEO Thomas Schaefer said that the brand should do so closing factories and forcing layoffs. Even the company’s works council had admitted this in November pay cuts might be necessary. Rumors suggested that VW’s small-scale plant in Dresden, where it builds ID.3s, and its plant in Osnabrück, where it builds the Porsche 718, could even be on the chopping block. But that no longer appears to be the case, despite declining market demand for electric vehicles and the end of production of the 718.
Volkswagen has had to make some tough decisions about its operations this year, including the decision to sell one of its factories in China. The company cited “economic reasons” for the move, even as it promises to introduce eighteen new models to the Chinese market by 2030.