{"id":155337,"date":"2025-01-10T08:24:13","date_gmt":"2025-01-10T08:24:13","guid":{"rendered":"http:\/\/www.spglobal.com\/mobility\/en\/research-analysis\/volkswagen-union-negotiations-deal-germany.html"},"modified":"2025-01-10T08:24:13","modified_gmt":"2025-01-10T08:24:13","slug":"vw-union-vs-management-the-future-of-vws-german-operations","status":"publish","type":"post","link":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/2025\/01\/10\/vw-union-vs-management-the-future-of-vws-german-operations\/","title":{"rendered":"VW Union vs. Management: The Future of VW\u2019s German Operations"},"content":{"rendered":"

The S&P Global Mobility AutoIntelligence service
\nprovides daily analysis of global automotive news and events. We
\ndeliver timely context and impactful analysis to navigate the
\nfast-moving industry. Behind the Headlines offers a bi-weekly dive
\ninto recent top stories.<\/em><\/p>\n

In the pre-Christmas news lull, one of the biggest automotive
\nindustry stories of 2024 almost went unnoticed. After weeks of
\nlabor disputes, discussions, strikes and tensions, VW Group reached
\na comprehensive cost-cutting agreement with its workforce,
\nrepresented by the Volkswagen labor union IG Metall, as well as
\nWorks Council leaders.<\/p>\n

The “Future of Volkswagen” Settlement: Gradual Job Cuts
\nbut No Plant Closures<\/strong><\/h2>\n

The agreement is known as “Zukunf Volkswagen” (The Future of
\nVolkswagen) and covers the Volkswagen passenger car brand,
\nVolkswagen Commercial Vehicles and Group Component operations in
\nGermany. The agreement will see VW shed 35,000 jobs across its
\ndomestic operations.<\/p>\n

However, VW's management made a significant compromise that
\nensures no plants will close because of the settlement.<\/p>\n

VW Job Cuts and Manufacturing Adjustments<\/strong><\/h2>\n

VW will reduce the two vehicle brands' manufacturing capacity
\nfrom more than 1 million units per year to 734,000 units. The
\n35,000 job cuts will occur gradually through 2030 and will be made
\nin a “socially responsible” manner, which means there will be no
\ncompulsory redundancies.<\/p>\n

VW claims that these changes will save more than \u20ac15 billion per
\nyear in the medium term. Of this, more than \u20ac4 billion per year
\nwill come from labor costs, structural and production measures and
\nplant usage, with labor cost savings alone contributing \u20ac1.5
\nbillion a year.<\/p>\n

In exchange, IG Metall and the Works Council won a new job
\nsecurity plan for the company's blue-collar workforce that will
\nlast until 2030. The plan also outlines ambitions for the core VW
\npassenger car brand to become “the technology leader of the world's
\nvolume manufacturers by 2030.”<\/p>\n

A Compromise for the Future<\/strong><\/h2>\n

The plan will allow VW to achieve its medium-term
\nreturn-on-sales target of 6.5%. According to VW Group CEO Oliver
\nBlume, “With the package of measures that has been agreed, the
\ncompany has set a decisive course for its future in terms of costs,
\ncapacities and structures. We are now back in a position to
\nsuccessfully shape our own destiny.”<\/p>\n

The agreement appears to be a major victory for VW's Works
\nCouncil and IG Metall. It makes no mention the 10% across-the-board
\npay cut or three plant closures that VW's management had sought.
\nThe lack of plant closures in particular is a major concession, and
\nfurther adjustments are likely between now and the end of the
\ndecade when the agreement expires.<\/p>\n

The Zombie Plant Dilemma: What to Do with Underperforming
\nPlants?<\/h2>\n

The danger now is that VW's management may end up operating
\nfacilities that are effectively “zombie” plants that have extremely
\nlow capacity and no real purpose within the company's wider
\nproduction network.<\/p>\n

For example, VW has yet to allocate any production to the
\nDresden facility beyond the end of 2025 and is exploring a
\nthird-party use for the plant, such as for a non-VW Group OEM
\ncontract manufacturing facility.<\/p>\n

Industry-wide Struggles in Europe<\/strong><\/h2>\n

This scenario mirrors challenges faced by other automakers.
\nAudi's Brussels plant is closing next year and Ford's Saarlouis
\nfacility in Germany is facing similar struggles. VW may be hoping
\nfor a huge uptick in European passenger car market demand in the
\nnext year to make its plan viable, but this seems unlikely.<\/p>\n

The situation at the Osnabrück facility also seems overly
\noptimistic, particularly given the low demand for the T-Roc
\nconvertible\u2014a model that has always been something of a niche
\nproposition. With Porsche moving Boxster and Cayman production away
\nfrom the facility, this lack of demand for the T-Roc convertible
\nwill soon force some action.<\/p>\n

The agreement falls short of VW management's original goal to
\nmake its German operations more competitive, especially after VW
\nbrand head Thomas Schäfer told Reuters in November that plant
\nclosures and layoffs were inevitable. This stance may have been a
\nnegotiating tactic, but it also could simply reflect reality. In
\n2015, VW passenger car and commercial vehicle domestic production
\nwas at 1.62 million units, but the new planned capacity of 734,000
\nunits is less than half that figure.<\/p>\n

The Viability of Maintaining Excess Capacity<\/h2>\n

VW now faces a tough question: even with job losses, can the
\ncompany maintain the same number of plants as a decade ago while
\nproducing half as many vehicles? In an increasingly uncertain
\nmarket driven by intense price competition and fierce battles for
\nshare across Europe, the answer remains unclear.<\/p>\n

Ultimately, consolidation of VW's domestic manufacturing
\nfootprint seems inevitable. While this latest settlement has
\npostponed that decision, it may be only a matter of time before the
\ncompany faces the reality of shrinking operations.<\/p>\n

Get a free trial of
\nAutoIntelligence<\/a><\/p>\n\n

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The S&amp;P Global Mobility AutoIntelligence service
\nprovides daily analysis of global automotive news and events. We
\ndeliver timely context and impactful analysis to navigate the
\nfast-moving industry. Behind the Headlines offers a bi-weekly dive
\ni…<\/p>\n","protected":false},"author":2519,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-container-style":"default","site-container-layout":"default","site-sidebar-layout":"default","disable-article-header":"default","disable-site-header":"default","disable-site-footer":"default","disable-content-area-spacing":"default","footnotes":""},"categories":[3267],"tags":[61,122,127,129,124,128,125,132,131,133,126,130,123,66,94,88,97,56,64,65,60,3344,3351,3357,3360,3335,3340,3362,112,3353,40,75,95,3350,3352,3356,3343,3359,3339,3345,3334,3341,104,3354,33,120,3358,3349,3337,3348,105,101,98,115,30,29,41,86,3342,3361,70,69,68,72,71,26,118,108,87,3355,46,55,48,52,54,51,50,83,3338,62,58,57,3336,109,35,3346,59,63,85,79,82,96,80,27,81,114,44,42,43,45,38,39,110,117,100,111,116,3300,73,89,90,92,91,93,84,78,37,102,34,36,77,67,74,99,113,3347,119,28,121,32,47,49,53,103,31,76],"class_list":["post-155337","post","type-post","status-publish","format-standard","hentry","category-car-or-automobile","tag-airpods","tag-anime","tag-anime-characters","tag-anime-cosplay","tag-anime-edits","tag-anime-merchandise","tag-anime-movies","tag-anime-news","tag-anime-recommendations","tag-anime-reviews","tag-anime-series","tag-anime-streaming","tag-animes","tag-app-store","tag-app-store-samsung","tag-appgallery","tag-appgallery-oneplus","tag-apple","tag-apple-music","tag-apple-tv","tag-apple-watch","tag-auto-financing-guide","tag-automobile-industry-news","tag-automobile-laws-and-regulations","tag-automobile-shows-and-expos","tag-automobile-specifications","tag-automobile-technology","tag-autonomous-vehicles","tag-bbc-sport","tag-best-cars-for-long-drives","tag-best-mobile-games","tag-bixby","tag-bixby-xiaomi","tag-car-accessories","tag-car-comparison","tag-car-customization-ideas","tag-car-insurance-advice","tag-car-interior-design-ideas","tag-car-maintenance-tips","tag-car-resale-value","tag-car-reviews","tag-car-safety-features","tag-champions-league","tag-city-cars","tag-cyberpunk","tag-cyberpunk-2077","tag-driving-tips-and-tricks","tag-eco-friendly-cars","tag-electric-vehicles","tag-family-cars","tag-fantasy-football","tag-fifa","tag-football","tag-formula-1","tag-fortnite","tag-free-fire","tag-free-mobile-games","tag-freebuds-pro","tag-fuel-efficiency-tips","tag-future-of-automobiles","tag-galaxy-a52","tag-galaxy-note-20","tag-galaxy-s21","tag-galaxy-watch-4","tag-galaxy-z-fold-3","tag-game","tag-games","tag-golf","tag-harmonyos","tag-highway-cars","tag-how-to-backup-iphone","tag-how-to-factory-reset-iphone","tag-how-to-reset-iphone","tag-how-to-restore-iphone","tag-how-to-unlock-iphone","tag-how-to-unlock-iphone-5","tag-how-to-unlock-iphone-6","tag-huawei","tag-hybrid-cars","tag-ios","tag-ipad","tag-iphone","tag-latest-car-models","tag-live-soccer","tag-lol","tag-luxury-cars","tag-macbook","tag-macos","tag-mate-40-pro","tag-mi-11-lite","tag-mi-home-security-camera-basic-1080p","tag-mi-home-security-camera-basic-1080p-huawei","tag-mi-smart-band-6","tag-minecraft","tag-miui","tag-mlb-scores","tag-mobile-game-design","tag-mobile-game-development","tag-mobile-game-marketing","tag-mobile-game-monetization","tag-mobile-games","tag-mobile-gaming","tag-nba-scores","tag-nba-standings","tag-nfl","tag-nfl-scores","tag-nhl-scores","tag-off-road-vehicles","tag-one-ui","tag-oneplus","tag-oneplus-9-pro","tag-oneplus-buds-pro","tag-oneplus-nord-ce-5g","tag-oxygenos","tag-p40-pro-plus","tag-poco-x3-pro","tag-pokemon","tag-premier-league","tag-pubg","tag-pubg-mobile","tag-redmi-note-10-pro","tag-samsung","tag-samsung-pay","tag-soccer","tag-sports","tag-sports-cars","tag-steam","tag-steeam","tag-top-10-anime","tag-valorant","tag-when-do-the-iphone-7-come-out","tag-when-does-the-iphone-7-come-out","tag-when-is-the-iphone-7-coming-out","tag-world-cup","tag-xbox-series-x","tag-xiaomi"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/155337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/users\/2519"}],"replies":[{"embeddable":true,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/comments?post=155337"}],"version-history":[{"count":1,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/155337\/revisions"}],"predecessor-version":[{"id":155338,"href":"https:\/\/gamefootballmobileanimeiphone.com\/index.php\/wp-json\/wp\/v2\/posts\/155337\/revisions\/155338"}],"wp:attachment":[{"href":"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