Volkswagen unveils major job cuts in cost-saving drive

AFP | Hanover

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Crisis - hit auto giant Volkswagen said Friday it planned to axe 35,000 jobs by 2030 in Germany after reaching an agreement with unions on a drastic cost-cutting plan.

The deal, struck at the end of marathon negotiations with labour representatives, will save Europe’s largest carmaker around four billion euros ($4.2 billion) a year, the German group said.

But the powerful IG Metall union hailed the agreement, which came just in time for Christmas and put an end to rolling strikes, saying it had averted forced redundancies and plant closures.

Volkswagen had originally said it was considering completely shuttering production sites in Germany, which would have been an unprecedented move in the 87-year history of the carmaker.

The situation at the eponymous mass-market Volkswagen brand, which employs around 120,000 people in Germany, was “serious” and demanded urgent action, management argued.

VW has struggled with the transition to electric vehicles as it battles rising competition in China from local manufacturers, such as BYD and Geely.

The 10-brand group -- which also owns Audi, Porsche and Skoda -- has said it also has to contend with falling demand and elevated labour and production costs in Europe.