Employees leave the Volkswagen plant in Zwickau after a work meeting. Europe’s largest carmaker announced it would once again tighten austerity measures at Volkswagen’s core brands amid worsening conditions.
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German car giant Volkswagen said on Tuesday it would scrap six labor agreements as the company’s standoff with unions and its works council intensifies.
“The company believes it is forced to do this due to the current economic challenges,” Volkswagen said in a statement translated by CNBC.
Volkswagen said it would end employment protection agreements in place for German employees since 1994, as well as salary agreements for employees in professional or leadership positions.
The company also said it would scrap casual worker agreements and agreements that stipulate companies must hire apprentices who have completed their training.
“The current phase creates uncertainty. We can deal with this if we create future prospects for the company as quickly as possible. This applies to the company as well as to the level of the wage agreement,” Volkswagen human resources chief Gunnar Killian Kilian said in a statement.
Volkswagen said employees will have job security until June 30, 2025, adding that the company will now begin negotiations with worker representatives.
In a statement released on Tuesday, Volkswagen works council chairwoman Daniela Cavallo reiterated that Volkswagen’s plans would be hampered.
“Now, the company has actually done what we have been expecting for days. And everything remains the same: We will resolutely resist this historic attack on our jobs. With us, there will be no layoffs,” she said.
Thorsten Gröger, chief negotiator for the IG Metall union, said on Tuesday there would be opposition to ending the employment protection agreement, especially the potential closure of factories.
“Job security is not only needed in good times, but especially in the current challenges, it should be an airbag for colleagues. Now, when the roads are slippery and there are more and more obstacles on the road, the public is taking away this airbag We will not accept this quietly and without action,” he said in a statement translated by CNBC.
It comes as European auto giants face a perfect storm of challenges on their path to full electrification.
Volkswagen said last week it no longer ruled out closing factories in its native Germany – a step previously thought to be impossible.
The carmaker said at the time that it took action to ensure “urgent structural changes are needed to improve competitiveness in the short term”.
