VW wage deal for 120,000 German workers avoids layoffs, plant closures
Volkswagen’s employee representatives say they have reached a wage deal
FRANKFURT, Germany (AP) — Volkswagen and its employee representatives said Friday they have reached a wage deal for 120,000 German workers that avoids plant closings and bars involuntary layoffs through 2030. The agreement includes provisions for VW to shed more than 35,000 jobs through early retirement and buyouts by 2030.
The deal, reached in drawn-out bargaining sessions that stretched late into the night, is aimed at enabling the Wolfsburg-based carmaker to cope with a drop in demand in Europe, higher raw-material costs and increasing competition from Chinese automakers.
Lagging sales in Europe mean the company has lost potential sales of 500,000 cars a year, or the output of two factories.
The deal would save VW 1.5 billion euros ($1.56 billion) a year in labor costs and 4 billion euros a year by slashing manufacturing capacity by more 700,000 vehicles across its German plants through different production arrangements.
