https://electrek.co/2024/12/19/volkswagen-may-not-close-its-germany-factories-after-all/
A new Bloomberg report cites that Volkswagen may in fact be working on a deal to keep its factories in Germany open.
The report stated that the automaker is considering keeping its plants up and running while reinstating job security agreements until 2030, with the tradeoff being that workers would forgo bonus payments, according to an anonymous source.
Earlier this month, a hundred thousand workers walked off at nine Volkswagen factories across Germany, including its EV-only factory, bringing assembly lines to a grinding halt in the battle over the slashed pay, lost jobs, and the automaker’s future. The strike came after weeks of collective bargaining negotiations in which Volkswagen didn’t back down from its plan to potentially cut thousands of jobs and close factories in Germany – a first in the automaker’s 87-year history in the country.
So a 35% reduction of the workforce.
Volkswagen said the deal would allow savings of €15 billion annually in the medium term and saw no significant impact on its 2024 guidance.
While there were no immediate closures, the company said it was looking into options for its Dresden plant and repurposing the Osnabrück site, including looking for a buyer. Some production would be relocated to Mexico.
“No site will be closed, no one will be laid off for operational reasons and our company wage agreement will be secured for the long term,” said works council chief Daniela Cavallo.
Süddeutsche Zeitung however reported Sunday that around 4,000 Volkswagen managers will face income reductions under the agreement.
Starting in 2025 and 2026, their salaries will decrease by 10 percent compared with current levels. The reduction will gradually lessen in the following years, with this adjustment remaining in place until 2030.
There are two types of “open” factories: ones that are running at an economic production rate, and ones that are “open”, but spend half their time with production suspended, and the workers drawing unemployment.
wrt moving production to Mexico, same scenario we have seen in the US, for thirty years. VW has two plants in Mexico. If TFG implements his tariffs, the Mexican plants will be at a disadvantage in the US market, but Mexico has a free trade agreement with the EU, so makes sense the plants would pivot to supplying the EU.
The one VW plant in the US does not have the capacity to supply every model to the US, in the volume that they are currently selling. It has crossed my mind the tariffs may seal VW of America’s fate, and I could be driving an orphan in a couple year’s time.
Steve