Volkswagen and Unions Reach Agreement

FRANKFURT (Reuters) – Key highlights of the deal reached on Friday between Volkswagen (ETR:VOWG_p) and unions regarding the carmaker's German sites and employment:

• Volkswagen will reduce its workforce in Germany by over 35,000 jobs, approximately one quarter of its staff, by 2030 in a socially responsible manner.

• A new job protection scheme will be implemented until 2030.

• Capacity at VW's German plants will decrease by 734,000 units, roughly a quarter of its total capacity, due to a predicted demand shortfall of about 500,000 cars—equivalent to two factories.

• Cost reductions will save 15 billion euros ($15.7 billion) annually in the medium term, with labor and capacity cuts contributing about 4 billion.

• No VW plants will be shut down.

• The future of the Osnabrueck factory beyond mid-2027 remains uncertain, with Volkswagen considering alternative scenarios and searching for investors.

• Vehicle production at the Dresden plant will cease by the end of 2025, and options for the site are being explored, including collaboration with third parties.

• VW's Wolfsburg plant, the largest, will reduce assembly lines from four to two, shifting Golf production to Puebla, Mexico, starting in 2027.

• Under the collective wage agreement, there will be no raises for staff over the next four years, with some bonuses being reduced or eliminated.

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