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Volkswagen AG (VOW.F) and its IG Metall* and Works Council employee representatives for Passenger Cars, Commercial Vehicles and Group Components as well as its Audi and other brands have concluded a joint agreement – dubbed ‘Zukunft Volkswagen’ (Future) – that guarantees jobs as it reduces production capacities at Volkswagen AG’s German locations. Ultimately, but not now, the workforce will be cut by more than 35,000 at Volkswagen’s German locations by 2030. This includes a newly formulated “job security plan” through to 2030 at the troubled automaker.
“Cost savings for Volkswagen AG of more than €15 billion per year in the medium term,” VW said. “Of this, over €4 billion per year will come from the present negotiations on labor costs, structural and production measures and plant utilization. Labor cost effects alone amount to €1.5 billion per year.” However, the capital markets remain skeptical taking a wait and see attitude about VW’s ability to compete with higher quality and less expensive brands. AutoInformed notes that this is a five-year bet on the come line or the promise that material cost savings will be secured. VW stock closed yesterday at €88.85. A year ago on 23 December it was €93.95.
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“The structural realignment of the company at an operational and collective level will create the conditions for achieving the return-on-sales target for the Volkswagen Passenger Cars brand in the medium term,” VW said.
“A full and final assessment of the impact of these cost effects on the Group’s operating profit in 2025 and subsequent years will be made in the coming weeks. At this point in time, the company does not expect any significant impact on the outlook for the 2024 financial year,” VW said.
The Plants
Volkswagen Passenger Cars brand
Wolfsburg Production
- In future, the ID.3 and CUPRA Born models will also be manufactured at the headquarters.
- Production of the Golf and Golf Estate models will be relocated to Puebla in Mexico from 2027.
- As a result, production will be focused on two assembly lines instead of four today.
- The future of the plant will also be secured at the end of the decade with the introduction of the electric Golf and another model based on the future SSP electric car architecture.
Wolfsburg Technical Development
- Technical Development is being reorganized to make it more effective. By using Group synergies, the competitiveness of Technical Development will be sustainably strengthened.
- As part of this realignment, around 4000 jobs will be cut by 2030. Tasks will also be transferred to other locations within the Technical Development network.
- In the future, the Technical Development department of the Volkswagen Passenger Cars brand will be responsible for the core brand group’s development network.
Emden
- The Emden plant will continue to produce the ID.7 saloon, ID.7 Tourer and the ID.4, even after the facelift.
Osnabrück
- The T-Roc Cabrio will be manufactured in Osnabrück until mid-2027. Options for a different use of the site are currently being explored.
Zwickau
- Zwickau will remain a production location for the Audi Q4 e-tron and Audi Q4 e-tron Sportback. As a result, vehicle production will focus on a single line from 2027.
- In addition, new business areas are to be developed in the context of the circular economy.
Dresden
- Vehicle production at the ‘Transparent Factory’ in Dresden will be discontinued at the end of 2025.
- Volkswagen AG is working on alternative options. These include the possibility of Volkswagen AG participating in a third-party scheme.
Volkswagen Commercial Vehicles
- The main plant of Volkswagen Commercial Vehicles in Hanover will remain the production site for the ID.Buzz and the Multivan. Concrete measures have been agreed to sustainably reduce factory costs. This will enable Volkswagen Commercial Vehicles to create the basis for investing in future products using its own resources.
Volkswagen Group Components
- In order to ensure the competitiveness of Volkswagen Group Components, a sustainable efficiency increase of up to €3 billion cumulatively by 2030 is targeted. The focus is on increasing economies of scale by systematically focusing the product portfolio on strategic core components. On this basis, labor costs will be reduced by around €500 million. The Volkswagen Group Components sites in Kassel, Braunschweig, Salzgitter, Hannover, Wolfsburg and Chemnitz will be retained and factory costs will be continuously reviewed. New working time models will be introduced to make production capacities more flexible.
“Following the long and intensive negotiations, the agreement is an important signal for the future viability of the Volkswagen brand, Volkswagen Commercial Vehicles and the component plants. With the package of measures that has been agreed, the company has set a decisive course for its future in terms of costs, capacities and structures. We are now back in a position to successfully shape our own destiny. The Board of Management and the wider management team are making a greater than proportional financial contribution,” said Oliver Blume, CEO of the Volkswagen Group. [VW is present in more than 140 markets and produces vehicles at 29 locations in 12 countries. The Volkswagen brand employs more than 170,000 employees.]
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Volkswagen Settles – Union Jobs Safe Until 2030
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Volkswagen AG (VOW.F) and its IG Metall* and Works Council employee representatives for Passenger Cars, Commercial Vehicles and Group Components as well as its Audi and other brands have concluded a joint agreement – dubbed ‘Zukunft Volkswagen’ (Future) – that guarantees jobs as it reduces production capacities at Volkswagen AG’s German locations. Ultimately, but not now, the workforce will be cut by more than 35,000 at Volkswagen’s German locations by 2030. This includes a newly formulated “job security plan” through to 2030 at the troubled automaker.
“Cost savings for Volkswagen AG of more than €15 billion per year in the medium term,” VW said. “Of this, over €4 billion per year will come from the present negotiations on labor costs, structural and production measures and plant utilization. Labor cost effects alone amount to €1.5 billion per year.” However, the capital markets remain skeptical taking a wait and see attitude about VW’s ability to compete with higher quality and less expensive brands. AutoInformed notes that this is a five-year bet on the come line or the promise that material cost savings will be secured. VW stock closed yesterday at €88.85. A year ago on 23 December it was €93.95.
Click for more.
“The structural realignment of the company at an operational and collective level will create the conditions for achieving the return-on-sales target for the Volkswagen Passenger Cars brand in the medium term,” VW said.
“A full and final assessment of the impact of these cost effects on the Group’s operating profit in 2025 and subsequent years will be made in the coming weeks. At this point in time, the company does not expect any significant impact on the outlook for the 2024 financial year,” VW said.
The Plants
Volkswagen Passenger Cars brand
Wolfsburg Production
Wolfsburg Technical Development
Emden
Osnabrück
Zwickau
Dresden
Volkswagen Commercial Vehicles
Volkswagen Group Components
“Following the long and intensive negotiations, the agreement is an important signal for the future viability of the Volkswagen brand, Volkswagen Commercial Vehicles and the component plants. With the package of measures that has been agreed, the company has set a decisive course for its future in terms of costs, capacities and structures. We are now back in a position to successfully shape our own destiny. The Board of Management and the wider management team are making a greater than proportional financial contribution,” said Oliver Blume, CEO of the Volkswagen Group. [VW is present in more than 140 markets and produces vehicles at 29 locations in 12 countries. The Volkswagen brand employs more than 170,000 employees.]
*AutoInformed on