Volkswagen Plans to Discontinue Employee Unemployment Insurance Coverage
Until the end of this decade, Volkswagen had planned to avoid layoffs due to operational reasons. However, the company has now ended this agreement with worker representatives, along with the promise to hire apprentices and temporary workers. Everything is now up for negotiation.
The struggling automaker Volkswagen has scrapped a number of collective agreements, including the Future Agreement on Job Security, which prevents layoffs due to operational reasons until 2029. The company stated that the economic situation forced this move. The Job Security Agreement has been in effect since 1994. IG Metall confirmed the termination of "a wide range of collective agreements" by Volkswagen's management.
Works council chairwoman Daniela Cavallo said, "The company has finally done what we expected for days." At the same time, she reiterated her opposition to the plans. "We will fiercely resist this historic attack on our jobs. There will be no layoffs due to operational reasons with us."
Volkswagen, Europe's largest car manufacturer, announced that the contract will expire at the end of the year. Starting in July 2025, layoffs due to operational reasons will be possible. Whether layoffs actually occur remains to be seen. Besides the Job Security Agreement, which previously prevented such layoffs, several other agreements have been terminated, such as the apprentice takeover guarantee and regulations for temporary work.
Volkswagen now aims to quickly negotiate a new regulation with the union and works council, as announced by personnel director Gunnar Kilian. The goal is to reach an agreement on a new regulation by mid-2025, when the Job Security Agreement expires. "The current situation is causing uncertainty. We can alleviate this by creating future-proof prospects for our company in the near future," Kilian said in a statement. The collective wage agreement negotiations for the VW wage agreement, which were originally scheduled for October, will now be held earlier and will include the agreements that have been terminated. IG Metall had offered this previously.
Last week, Volkswagen announced that it would tighten its austerity measures significantly and end the employment security that has been in effect for three decades. The closure of plants is also being considered. The works council accused the management of making serious mistakes. Employee representatives have already suggested a four-day workweek.
Volkswagen has officially terminated the Future Agreement on Job Security, which prohibited layoffs due to operational reasons until 2029. The manufacturing of motor vehicles at Volkswagen may be impacted by this decision, as the company no longer has this agreement preventing layoffs.
Further negotiations between Volkswagen and the union and works council are expected to determine the impact of this termination on the manufacture of motor vehicles and potential layoffs within the company.
