Volkswagen Layoffs: German Automaker VW Quits Labour Agreement, Opening Door for Job Cuts Amid Slumping Sales and Rising Costs
Volkswagen has reportedly announced to terminate a labour agreement with IG Metall, potentially opening doors for potential layoffs as part of a restructuring effort to reduce costs amid falling sales and increased competition from Chinese manufacturers.
New Delhi, September 11: Volkswagen, the German automaker reportedly announced its decision to terminate a long-term labour agreement, raising concerns over potential layoffs amid falling sales and increasing costs. As per reports, VW informed union leaders that it would end the agreement that had provided job security for over 1,20,000 workers, raising potential job cuts.
Volkswagen reportedly warned that it may need to close one or two assembly plants in Germany. It can be part of its restructuring plan to stay competitive due to lower demand in Europe and increased competition from Chinese manufacturers. As per a report of The New York Times, Volkswagen's decision to quit the labour agreement will likely open doors for potential layoffs. Volkswagen Layoffs: CEO of German Automaker Defends Decision To Cut Employees Amid Cost Saving Plan, Cites Economic Pressures.
Volkswagen plans to terminate its job security agreement with the union IG Metall, citing the need to reduce costs for the company’s future. The labour agreement, which has been in place since 1994, ensured no layoffs until 2029 but it may now be dissolved with 3 months' notice. Although the pact remains valid till the end of the year, the layoffs could by June 2025.
Volkswagen's labour union, IG Metall, which represents automotive workers, has expressed strong opposition to the decision. Daniela Cavallo, a member of IG Metall, intends to fight the automaker’s decision, reportedly stating, "We will put up fierce resistance to this historic attack on our jobs." Volkswagen To Begin Layoffs? Volkswagen Says Dropping No-Job Cuts Pledge, Won't Rule Out Closing Plants in Germany.
As per reports, Volkswagen and IG Metall are set to begin wage negotiations in the coming months, with the union demanding a seven percent pay increase with demands including stopping plant shutdowns. Volkswagen may also terminate an agreement that requires them to give permanent jobs to all trainees and apprentices, as well as a deal that gave temporary employees higher wages than the usual rate in the auto industry.
(The above story first appeared on LatestLY on Sep 11, 2024 11:23 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).