Volkswagen, which is preparing an unprecedented savings plan, on Tuesday formalised the termination of its employment guarantee agreement, an agreement that has been in force for 30 years in Germany. This is enough to mark the first stage of negotiations with staff representatives that promise to be stormy.
The leading European manufacturer caused a stir at the beginning of September by announcing the early end of this guarantee, which dates back to 1994 and whose current version extends until 2029.
“The company is forced to take this decision due to the current economic challenges,” the German group said in an internal note.
Possible layoffs from mid-2025
This termination of December 31 opens the way for possible layoffs as of June 30, 2025.
However, Volkswagen has not yet given details of future cost-cutting measures, which could include the closure of factories in Germany, a first for the group. Management is asking unions to take part in the discussion.
“This period now offers us the opportunity to find, in collaboration with employee representatives, solutions that will enable us to sustainably position Volkswagen in terms of competitiveness and future,” said Gunnar Kilian, the group’s director of human resources, quoted in the note.
Many difficulties
The text on job security adds to a total of six collective agreements defining labour relations within the group that Volkswagen rescinded on Tuesday. These texts will also be renegotiated with employee representatives.
Falling sales in China, the group’s largest market, falling demand for electric vehicles in Germany, competition from Chinese manufacturers with their cheaper battery models, strategic errors: the difficulties of the world’s second-largest manufacturer are numerous.
“At current costs, Volkswagen will not be able to maintain employment in its current structure. Volkswagen must increase its productivity and reduce its costs in a sustainable manner, especially at its German plants,” the manufacturer said in a statement sent on Tuesday.
The manufacturer employs around 300,000 people in Germany, of which 120,000 are employed by the Volkswagen (VW) brand itself, which is the target of savings measures due to its lack of profitability, although it constitutes the heart of the group’s sales with models such as the Golf or the electric ID. .3.
Source: BFM TV
