Volkswagen AG to terminate several collective agreements at year-end as IG Metall talks begin

Representatives of Volkswagen AG and IG Metall met in Hanover to open negotiations after both sides invoked the reopener clause of the collective bargaining agreement for the future, a step the agreement expressly allows when there have been significant changes in the assumptions or economic conditions behind the deal of January 1, 2025. Volkswagen AG believes that is the case. The company says its objective is to systematically implement the previously agreed measures and to fully exhaust all other options for a socially responsible headcount reduction. The two parties have agreed to meet for further talks in the second half of October. Volkswagen AG comprises Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, Volkswagen Group Components and the Group divisions.

Volkswagen describes the situation throughout the automotive industry as extremely challenging, pointing to geopolitical tensions, trade barriers and increasing competition primarily from China that have significantly exacerbated its financial situation in recent years. The company calls the transformation under way the most profound in the industry's history. It argues it is more important than ever to reduce overhead costs and adjust them to a competitive level, and that various provisions in the terminated agreements require adjustment given the current cost pressure. Serving notice on the agreements, the company says, creates negotiating space for further discussions.