Volkswagen scraps decades-old German job security pact, says union

Volkswagen gave IG Metall notice on Tuesday (Sep 10) it was scrapping a range of labour agreements, including a guarantee of jobs until 2029 at six German plants, the union said.

Europe’s top carmaker is cancelling the decades-old employment guarantees as part of a cost-cutting drive that has triggered a showdown with workers as Volkswagen struggles to compete against cheaper Asian rivals.

“These cancellations arrived seconds ago,” IG Metall said in an emailed statement.

Volkswagen’s move follows a threat that it could shut plants on German soil for the first time in its 87-year history, which sent shockwaves through the global autos sector and prompted high-level German government concern.

The head of the company’s works council has vowed fierce resistance against lay-offs and factory closures, blaming management for Volkswagen’s ills.

IG Metall had previously said it could consider moving to a four-day week as an alternative to closures – replicating an earlier cost-cutting drive in the 1990s.

Negotiations were due to start in mid- to late October, with strikes possible from the end of November.

Volkswagen’s troubles come at a time of economic uncertainty, with weak growth, higher energy prices and questions over trade ties with the lucrative Chinese market testing Germany’s model for consensual industrial relations. REUTERS