Representatives of the works council and the management have reached a fundamental agreement on the billion-euro cost-cutting package for the reorganization of the automobile manufacturer Volkswagen. The compromise, reported by the “Handelsblatt” on Friday, citing several people familiar with the developments, is not yet final, as the relevant committees still need to approve it.
In the afternoon, the management, the presidium of the supervisory board, and the labor union’s tariff commission are set to discuss the agreed-upon solutions. “It can still fail” said a source in the negotiators’ circles. There are individual representatives in the management and supervisory board who demand a hard austerity course and risk massive confrontations with the works council.
The management had announced a drastic cost-cutting course in the face of market decline and had canceled the job security guarantee. The company also did not rule out the closure of sites and massive job cuts.
According to the agreement, the planned cost-cutting target of four billion euros is to be reached, as previously announced. The cuts in the factory network are expected to be less drastic than expected. It is said that a buyer will be found for the Osnabrück plant and the smaller production in Dresden is to be reorganized or closed. A closure of the factories in Zwickau or Emden is reportedly off the table.
The company declined to comment on the matter when asked.