FRANKFURT, Germany (AP) — Volkswagen employee representatives said Friday they have reached a pay deal that fends off management proposals for factory closures in Germany and bans involuntary layoffs until 2030.
The company said the deal includes provisions to cut more than 35,000 jobs by 2030 in a “socially responsible” manner, news agency dpa reported.
Union and worker representatives were due to hold simultaneous press conferences on Friday to explain details of the deal reached this week after nearly 60 hours of negotiations, as the two sides pushed to reach an agreement before the Christmas holidays.
Thorsten Groeger, negotiator for the IG Metall union, said workers also accepted “painful concessions.” A union statement said the loss of bonus payments and other compensation was part of the deal, but monthly wages would not be affected. insisted on a 10% pay cut.
Volkswagen says it must reduce costs in Germany to levels achieved by competitors and by Volkswagen plants in Eastern Europe and South America. The company had demanded a 10% pay cut for 120,000 German workers and said it cannot avoid shedding factory capacity that is no longer needed.
The company is facing a drop in demand in Europe, higher costs and increasing competition from Chinese car manufacturers. Volkswagen built factories to serve a European car market with annual sales of 16 million cars, but now faces demand for about 14 million cars, the company said. That represents a loss of 500,000 cars per year, or the production of two factories.
