German car giant Volkswagen, under pressure from the union, abandoned the idea of cutting costs by closing three factories and laying off some staff or reducing salaries by 10%. It is assumed that long-term business goals can be achieved by other means: by reducing production capacity and reducing staff without layoffs.
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According to the Financial Times, VW’s works council concluded that it is possible to achieve the desired savings of 4 billion euros per year without violating the rights of union members, who have long been carrying out strikes and negotiations. (next wave started in December).
“No plant will be closed, no one will be laid off and our internal collective agreement will be maintained in the long term,” quotes the leader of the VW works council, Daniela Cavallo, in the publication.
The automaker and the union have reached an agreement according to which the corporation’s five factories in Germany will reduce production to 734 thousand units per year.
The parties also agreed that the staff reduction by 35 thousand people until 2030 will be achieved with soft methods: to begin with, VW will not hire new staff after the retirement of old employees and will not hire apprentices either.
The top management of the corporation, which left the Russian Federation in 2022, explained the need to reduce costs due to the drop in demand for cars in Europe, high competition with China and, as a consequence, the drop in sales.
Author:
Ekaterina Alipova
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
