Volkswagen (VW) has made a deal with the IG Metall trade union. This deal will stop plant closures in Germany and avoid job losses for now. However, they have agreed to cut over 35,000 jobs in a careful way by 2030. This will help save about €15 billion (£12.4 billion).
VW thought about closing up to three factories because they wanted to save money. They also asked workers to accept a 10% pay cut. The union wanted a 7% pay raise instead.
The deal includes some changes to production. Union leaders are happy about the agreement. They said no factories will close and no one will lose their job because of work reasons. Workers will also keep their wage agreement for a long time.
The job cuts might happen through things like early retirement. A planned 5% pay raise will be stopped in 2025 and 2026 to support the company.
The number of apprenticeships in Germany will go down from 1,400 to 600 from 2026. VW is looking at moving some production to Mexico. German Chancellor Olaf Scholz welcomed the deal, calling it a good solution.
Vocabulary List:
- Closure /ˈkloʊʒər/ (noun): The act of shutting down a business or operation permanently.
- Negotiation /nɪˌɡoʊ.ʃiˈeɪ.ʃən/ (noun): The process of discussing something in order to reach an agreement.
- Apprenticeship /əˈprɛntɪsʃɪp/ (noun): A system of training a new generation of practitioners in a trade or profession.
- Retirement /rɪˈtaɪərmənt/ (noun): The action of leaving one’s job and ceasing to work.
- Production /prəˈdʌkʃən/ (noun): The process of creating goods and services.
- Agreement /əˈɡriːmənt/ (noun): A negotiated and typically legally binding arrangement between parties.
How much do you know?
