IG Metall, Volkswagen Agreement Averts Site Closures, Forced Redundancies -- Update

Dow Jones12-21 02:09

By Sarah Sloat and Andrea Figueras

Volkswagen and labor representatives struck an agreement Friday on cost savings aimed at restoring competitiveness at the German auto company, the IG Metall union said.

Following weeks of negotiations punctuated by strikes, the German union and the Volkswagen workers' council said that the deal would avert plant closures and forced redundancies but that employees would have to make some concessions on pay.

The union said pay increases recently negotiated for the industry would be initially suspended at Volkswagen.

The two sides had been aiming to reach an agreement by Christmas. Volkswagen couldn't be reached immediately for comment.

Volkswagen has been under pressure to improve competitiveness and boost profitability while battling a tough economic environment, high domestic costs and anemic demand for electric vehicles. The company also faces increasingly fierce competition from lower-cost Chinese EV makers.

As part of the plan, the Osnabrueck plant will produce the T-Roc Cabrio until late summer 2027, longer than previously estimated. Vehicle production in Dresden will end at the end of 2025, but an alternative concept for the site is being developed, the union said.

Write to Sarah Sloat at sarah.sloat@wsj.com

(END) Dow Jones Newswires

December 20, 2024 13:09 ET (18:09 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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