Germany: IG Metall and VW reach a deal

VW and IG Metall agree to cut 35,000 jobs by 2030 without plant closures or immediate compulsory redundancies. Deal includes wage increase suspension and reduced apprenticeships

The key points to know:  VW and IG Metall agree to cut 35,000 jobs by 2030, but no plant closures or immediate compulsory redundancies. Under the agreement, a 5% wage increase that was previously agreed will also be suspended in 2025 and 2026. The number of apprenticeships on offer each year in Germany will be reduced from 1,400 to 600 from 2026, and it will look at shifting some production to Mexico.

Why this matters:  Demonstrates negotiated approach to workforce reduction, one that balances cost-cutting with job security concerns. According to the head of the VW works council: “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".

What happens next: Implementation of agreed measures over coming years. Meanwhile Reuters reports that, IG Metall has filed a court motion to have the non-union head of the Tesla works council removed for trying to block the union’s influence in the company’s Berlin gigafactory. Tesla refuses to enter into collective bargaining negotiations with Metall.