(Updated) – Volkswagen’s board and its general works council signed a pact that involves the loss of 23,000 jobs in Germany to help earnings by €3.7 billion per year by 2020 and “initiate the return of the Volkswagen brand to a path of profitable growth.”
Up to 30,000 jobs may be cut around the world by Volkswagen, which employs more 600,000 people in more than 30 countries.
“The program for the German plants with about 120,000 employees is to significantly improve the competitiveness of the Volkswagen brand and to make the company fit for the future,” said Volkswagen.
“It will lay the foundation for the transformation of Volkswagen from a pure automaker into a successful mobility service provider in the age of digitalization and increasing e-mobility.”
It added: “Compulsory redundancies are to be excluded and the workforce is to be reduced in a socially compatible way.”
The company said that over the next few years, investments of about €3.5 billion in “future-oriented” areas of its German facilities were planned.
“This will result in the creation of 9,000 jobs,” said Volkswagen.
“On the other hand, there is to be a loss of up to 23,000 jobs in conventional areas in Germany, which will be accomplished in a socially compatible way.”
Chairman of the Brand Board of Management, Herbert Diess, said: “With the pact for the future, Volkswagen will be taking a major step forwards.
“The pact represents a fundamental transformation of the value stream, the development of new competences and strategic investment.
“We will be strengthening the company’s economic viability and competitiveness and will be safeguarding the future of our plants.
“The socially compatible loss of jobs will be offset by the creation of jobs in other units.”
General Works Council Chairman Bernd Osterloh said: “The most important news is that the workplaces of our permanent workforce will be safeguarded.
“We have agreed that compulsory redundancies are to be excluded up to the end of 2025.
“In view of what is happening at other companies, this is a considerable success in troubled times.
“With the pact for the future, we will be entering the field of next-generation e-mobility.
“The new cars based on the Modular Electric Drive Kit and electric components from our plants will make our German locations pioneers of electrification within the Volkswagen Group.
“The Works Council has ensured that these future-oriented vehicles will be made in Germany and not in other countries. Of course, the pact for the future has positive and negative aspects.
“However, it represents an acceptable compromise for both parties, reached after a long struggle. We have now achieved a reasonable result.”