Volkswagen Ends Labor Agreements as Cost Cuts Deepen

(MENAFN) German automaker Volkswagen ends several company-level collective labor agreements on Wednesday as part of a broader effort to reduce expenses, prompting strong criticism from the IG Metall union.

The terminated agreements are set to expire at the end of December.

Volkswagen says changing economic conditions require adjustments to existing labor provisions and rejects the union’s request for a five-percent wage increase.

Arne Meiswinkel, Volkswagen brand board member for human resources, says conditions across the automotive industry have weakened considerably over the past 18 months.

He points to intensifying competition from Chinese carmakers in the European market and describes the transformation underway as structural and extensive.

Meiswinkel says Volkswagen faces growing pressure to reduce expenses and bring its cost structure closer to competitive levels.

According to IG Metall, Volkswagen delivers termination notices covering 10 agreements during a meeting in Hannover focused on reviewing obligations under the company’s restructuring agreement reached in 2024.

The agreements affected include provisions covering wages, working conditions, additional payments, employees working special schedules, as well as workers in specialist and management positions.

The union also says provisions concerning employment opportunities for apprentices after completing their training are partly affected by the terminations.

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