German union IG Metall announced on Friday that it had reached an agreement with Volkswagen to carry out involuntary layoffs and plant closures at the automaker’s production plants in Germany until 2030.
Union representatives have been negotiating for weeks with the company, Europe’s largest carmaker, over cost-cutting measures, plans to close three factories, cut wages and cut jobs.
“We have managed to find a solution for the workers at Volkswagen plants that promises employment, protects products in factories and at the same time allows for significant long-term investments,” union negotiator Thorsten Gröger said in a statement.
“None will be closed, no one will be fired for operational reasons and our company wage agreement will be guaranteed in the long term,” said the president of the Volkssalaryn works council, 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 a 70-hour marathon of negotiations, 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 contributions from employees, but at the same time creates prospects for the workforce.”
Factory closures, wage cuts and layoffs proposed through VW had already led thousands of people across the country to go on strike twice in the past month.
The union had threatened more strikes in the new year if an agreement was not reached before the Christmas holidays.
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“After long and extensive negotiations, the agreement is a sign of the long-term 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 the China festival, weak demand in Europe and slower-than-expected adoption of electric cars as reasons for cutting costs.
nm/ko (AFP, Reuters, dpa)