Volkswagen And Union Agree To Job Cuts Of Over 35,000 By 2030

(RTTNews) - Volkswagen Group (VKW.L, VLKAF.PK, VOW.BE) and its union have agreed on a socially responsible reduction in the workforce of more than 35,000 across the company's German sites by 2030. The agreement includes a newly formulated job security plan through to 2030. The company does not expect any significant impact on the outlook for the 2024 financial year.

The German auto major said it has concluded a joint agreement titled 'Zukunft Volkswagen' (Future Volkswagen), following intensive negotiations with IG Metall and the Works Council. The company is set to reduce labor costs by 1.5 billion euros per year, with a wage settlement agreement valid until 2030.

In the short term, labor cost reductions and structural measures, including capacity reductions and decreased development costs, are expected to generate cost effects exceeding 4 billion euros per year.

Additionally, Volkswagen plans to reduce capacity by 734,000 units across its German plants. This will provide the foundation for significant investments in future products through 2030.

The structural realignment at both operational and collective levels is designed to help Volkswagen Passenger Cars achieve its medium-term return-on-sales target.

According to the company, production of the Golf and Golf Estate models will be relocated to Puebla in Mexico from 2027. As a result, production will be focused on two assembly lines instead of four today.

In the future, the Technical Development department of the Volkswagen Passenger Cars brand will be responsible for the core brand group's development network. The Emden plant will continue to produce the ID.7 saloon, ID.7 Tourer and the ID.4, even after the facelift.

The T-Roc Cabrio will be manufactured in Osnabrück until mid-2027. Options for a different use of the site are currently being explored.

Zwickau will remain a production location for the Audi Q4 e-tron and Audi Q4 e-tron Sportback. As a result, vehicle production will focus on a single line from 2027, the compaby said.

Vehicle production at the 'Transparent Factory' in Dresden will be discontinued at the end of 2025. The company is working on alternative options. These include the possibility of Volkswagen AG participating in a third-party scheme.

The main plant Volkswagen Commercial Vehicles plant in Hanover will remain the production site for the ID.Buzz and the Multivan.