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The automaker agreed to keep its ten factories in Germany open and guarantee workers’ employment until the end of 2030.
By Melissa Eddy
Reporting from Berlin
Volkswagen, Germany’s largest carmaker, reached an agreement with its union on Friday, ending three months of clashes that rocked the country and highlighted the extent of Germany’s trade decline.
Under the terms of the agreement, reached after more than 70 hours of negotiations in a hotel in the western city of Hannover, the company committed to keeping its ten factories in Germany open and guaranteeing the employment of its employees until the end of 2030. In that moment, the company will bring out a restructuring plan that will come with the elimination of more than 35,000 jobs via retirements and pensions.
In return, the IG Metall union, which represents the maximum of Volkssalaryn workers, withdrew its call for a wage increase until 2031 and agreed to bonus cuts and production cuts for shipments of thousands of cars at several plants.
“No site will be closed, no one will be made redundant, and our company wage agreement will be secured for the long term,” Daniela Cavallo, the head of the works council at Volkswagen, said in a statement announcing 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 consecutive year. Economists expect a significant return to expansion in 2025.
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