Volkswagen finalizes agreement for collective job security measures.
Until the end of the upcoming decade, Volkswagen had planned to avoid layoffs due to operational needs. However, the company has now reneged on this commitment, terminating the relevant agreement with employee unions. This decision marks an end to a three-decade-long understanding that was repeatedly extended.
The struggling automaker has scrapped numerous collective bargaining agreements, including the so-called "Future Agreement" that ruled out layoffs due to operational needs until 2029. The company cited current economic difficulties as the reason for this move, according to Personnel Director Gunnar Kilian. This job security provision had been in effect since 1994. The cancellation of a variety of collective bargaining agreements by Volkswagen's board has been confirmed by IG Metall.
"At last, the company has done what we expected for days," said works council chairwoman Daniela Cavallo. She also expressed her opposition to the plans. "We will fiercely resist this historic assault on our jobs. There will be no layoffs due to operational needs."
Volkswagen, Europe's largest automaker, has announced that the contract will expire at year's end. Starting six months later, in July 2025, layoffs due to operational needs will be permitted. Alongside the agreement on job security, several other agreements have been scrapped, such as the apprenticeship guarantee and temporary work regulations.
The company is now eager to initiate negotiations with the trade union and works council about a new regulation, as announced by Personnel Director Kilian. The aim is to agree on a successor regulation by mid-2025, when the job security provision expires. "The current situation is generating uncertainty. We can alleviate this by creating viable prospects for our company in the near future," Kilian explained in a statement. The collective bargaining negotiations on the VW wage agreement, initially scheduled for October, will be accelerated and expanded to cover the agreements that have now been scrapped. This was previously offered by IG Metall.
Last week, Volkswagen announced that it would intensify its cost-cutting measures and scrap the three-decade-long job security provision. Plant closures have also been put onto the table. The works council has accused management of making serious errors. Employee representatives have already suggested a four-day work week.
Manufacturers facing economic challenges often need to make tough decisions. Despite Volkswagen's initial commitment to avoid layoffs until 2029, various manufacturing agreements have been terminated.
Volkswagen, being a significant manufacturer, has numerous stakeholders affecting its operations, including employees, unions, and the works council.
