Volkswagen workers are ready to cut wages to save factories

The German car giant Volkswagen could not close factories in Germany, but instead cut wages – agreed representatives of workers who are at risk of layoffs, writes Reuters.

As the group reported on November 20, representatives of the trade union IG Metall, which protects the interests of workers in the metallurgical and electrical industries, took a surprising step – they agreed to pay cuts​​​​ to avoid major stoppages and plant closures in Germany. Volkswagen soon.

Before the start of the next round of negotiations on the collective agreement, the union and the VW works council proposed to cut labor costs by 1.5 billion euros – a wage cut. In return, workers asked for guarantees about job security and the future of the company’s ten locations across Germany.

The automaker’s management has not yet commented on the work team’s decision. However, if the demands to keep the plants are not met, the union has threatened to call a major strike.

Since 2019, German car companies have cut around 46,000 jobs as they gradually shift to making electric vehicles. Competition from cheaper Chinese electric vehicles and a slowing German economy have further damaged the auto industry. In October, Volkswagen announced a 64% cut in profits and its decision to close three plants. The company said in this way that it intends to reduce costs from its budget by around 18 billion euros.

In October Volkswagen is recommended reducing the wages of enterprise workers by 10% so that the company remains competitive and able to save jobs.
VW plants in Germany employ around 120,000 people, with around half of them working in Wolfsburg. The brand has a total of ten production sites in Germany: six in Lower Saxony, three in Saxony and one in Hesse. The job guarantee, which had lasted for more than 30 years, ended with VW in September. How German carmakers found themselves on the brink of crisis – read on material “Fontanka”.