Volkswagen and labor leaders are moving closer to an agreement to restructure the automaker’s namesake brand without shuttering factories in Germany, according to people familiar with the matter.
Management is willing to keep plants running and reinstate job security agreements until 2030 in return for workers foregoing bonus payments, said the people, who asked not to be named because the discussions are private.
Additional cost-cutting measures discussed include moving production of the Golf hatchback from Germany’s Wolfsburg factory to Mexico, and ending production of VW-branded electric vehicles in Zwickau to trim capacity, the people said.
An agreement would prevent widespread walkouts and hand Chief Executive Officer Oliver Blume the fresh start he’s seeking to turn around Europe’s biggest carmaker.
dVW is trying to reduce costs and excess capacity across its German production network as it confronts dwindling market share in China and slowing demand for electric vehicles in Europe and the US.
The details of an agreement could change and the talks, which are ongoing, may still end without a deal, they said. Both sides have been holding a fifth round of negotiations since Monday.
VW has floated measures including laying off workers, cutting wages and closing three German factories to help save €17 billion (R321 billion) at the VW brand.
Spokespeople for Volkswagen and IG Metall declined to comment.
VW shares declined as much as 1.2% in Frankfurt. They’re down 22% this year.
Automakers are battling a sales slowdown in Europe, where consumers under pressure from elevated living costs are balking at the high price of EVs.
New-car registrations in the region declined 2% in November from a year earlier to 1.06 million units, led by sharp falls in France and Italy, the European Automobile Manufacturers’ Association said Thursday.
Volkswagen’s peer Stellantis is trying to recover from a disastrous year that culminated in the ousting of former Chief Executive Officer Carlos Tavares. Manufacturers are separately facing billions of euros in fines if they fail to meet stricter European fleet-emissions rules slated to kick in next year.
Suppliers have also announced drastic cost-saving measures in response to the slump in demand. Robert Bosch GmbH, ZF Friedrichshafen and Schaeffler are among the parts makers that are pursuing thousands of job cuts as the fallout hits the industry’s supply chain.
The VW talks dragged into a fourth day on Thursday in part because of their complexity.
Negotiations center not just on wages across the VW brand but also on model planning across VW’s factory network and the company’s five-year investment planning process.
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