German union demands Volkswagen commitment to 2024 labour agreement

IG Metall Demands Volkswagen Stick to 2024 Labour Agreement Amid Job Cut Fears

Union Concerns and Volkswagen's Response

By Christina Amann and Rachel More

HANOVER, Germany, Sept 11 (Reuters) - Germany's IG Metall is demanding Volkswagen commits to honouring a landmark labour deal struck in 2024, a leading union representative said, citing fears that a recent turnaround agreement could undermine it with mass job losses.

Legal Clause Invoked by IG Metall

IG Metall members on Friday decided to invoke a legal clause, which was part of the agreement reached in December 2024, calling management to the table for talks on the matter, Thorsten Groeger told reporters in Hanover.

Escalation in Labour Dispute

The move marks an escalation in the fight for Volkswagen's future, which has pitted management against the group's labour and state government stakeholders over a plan to roughly double layoffs to some 100,000 and drastically cut production.

"This uncertainty cannot continue for the workforce at our locations," said Daniela Cavallo, Volkswagen works council chief.

Volkswagen's Position

Volkswagen said it would welcome talks.

"Volkswagen expressly welcomes this," the carmaker said in a statement.

Company's Perspective on Labour Measures

"From the company's perspective, this step is necessary to consistently implement the measures adopted in 2024 and, at the same time, to address the additional challenges facing the entire automotive industry," it said.

The 2024 Labour Agreement

The 2024 deal, which was agreed after mass walkouts, resulted in 35,000 layoffs and wage concessions, but fended off immediate plant closures while securing certain job and investment guarantees from management.

IG Metall is prevented from holding strikes until the end of the year under existing labour agreements.

Renewed Tensions Over Future Plans

CEO's Overhaul and Industry Challenges

Tensions between the two sides flared again in recent months over CEO Oliver Blume's overhaul plans, including four threatened plant closures early next decade, as Europe's top carmaker battles Chinese competition, mounting tariff payments and high manufacturing costs.

Calls for Policy Support

Cavallo said management's criticism of German manufacturing costs was "finger-pointing". She called more broadly for policies to protect industry against heavily subsidised competitors from China, such as an expansion of EU tariffs to cover Chinese-made plug-in hybrids and local content rules for car components.

Competitive Pressures in the Automotive Industry

"We the automotive industry are in fierce competition, with players who are entering the market under completely different competitive conditions - conditions that we simply cannot keep up with," the labour chief said.

(Editing by Christoph Steitz, Miranda Murray and Susan Fenton)