Volkswagen to Open IG Metall Talks Nov. 24 Amid Cost Cuts, U.S. Audi Factory Rumors

Volkswagen Group is desperate to cut costs. As recently as 2023, the company had an operating profit of €22.6 billion, but by 2025, that number had been slashed to €8.9 billion. 2026 may be half of that. In today’s market, it has more factory capacity in Germany that it needs, which has led to a proposal to shutter as many as four of them and reduce its domestic workforce by 50,000 workers. Globally, it plans to eliminate up to 100,000 jobs over the next four years. It expects its austerity plans to create €20 ⁠billion in savings across its entire value chain by 2030, while lowering ​overhead costs by €11 billion. Reportedly, it plans to stop making half of its existing models.

On September 30, 2026, Volkswagen Group announced it was terminating many of the wage provisions it agreed to in December, 2024 with IG Metall, the union that represents many of Volkswagen’s workers. According to Reuters, the terminated provisions included wage agreements that cover more than 100,000 workers at Volkswagen’s primary factories in Germany. Those agreements govern such things as working hours and holiday pay, provisions that IG Metal sees as benefits it won for workers after long and often contentious negotiations with the company.

The last time Volkswagen cancelled parts of its collective bargaining framework with the ​union was in September, 2024. That triggered ​a wave of strikes ⁠that culminated in a landmark labor deal in December, 2024 that included 35,000 job cuts. Part of that agreement provided either side could revisit the terms of the agreement if there was a material change in circumstances.

The company says its deteriorating finances justify its decision to cancel the wage provisions previously agreed to.  Human resources chief Arne Meiswinkel said management was acting to ensure the company ​remains fit for the future. “We must continue to work on our cost structures,” he said. Terminating the agreements “gives us room to negotiate ‌so that ⁠we can then agree on the necessary measures.”

Despite that justification by the company, the union and the workers are furious. IG Metall representative Thorsten Groeger thundered, “This is a despicable blow to the workforce. We will not accept this. Anyone who tries to reach into the employees’ pockets must ​expect a fight.”

IG Metall is contractually bound not to strike the company until January 1, 2027, but it is rattling its sabers and warning that strikes will be starting as soon as that deadline passes if the company’s plan not to honor the 2024 agreement is not rescinded by October 31. “We are giving the company until the end of October to withdraw this notice of ​termination,” Thorsten Groeger said in Hanover, where unions and management met for a fresh round of talks last week. “Otherwise a massive process will be set in motion which, let me make this clear, will pave the way for industrial action at Volkswagen.”

“The economic situation has deteriorated dramatically since the collective bargaining agreement for the future was concluded in 2024. This creates an urgent need for action,” Arne Meiswinkel said after ​the two sides met in Hannover last week. After that meeting, the works council said the company’s executive board plans to freeze the salaries of 660,000 staff worldwide until 2030. The union is not amused. “We know which operating conditions have changed, but we also know which ones ​were foreseeable, and we expect the highest-paid management board in this country to work with ​us to find ⁠a solution,” said works council chief Daniela Cavallo.

The two sides have agreed to begin collective bargaining talks in Emden on November 24, with a second round of negotiations scheduled for December 15 in Zwickau. In a blog post, the company said its priorities are:

• the maximum use of voluntary departure options.
• the establishment of transfer companies eligible for public funding as an additional measure. Employees can join these companies to open up new prospects in the labor market, for example by gaining additional qualifications. The company’s aim is to manage these changes in a way that gives employees prospects, choices and support for their next steps.
• a reduction in labor costs.

If it sounds like that second point is a way of pushing off some of the company’s financial burden onto German taxpayers, you may be onto something.

“[This] far-reaching transformation program sets out a course of action for the Group and its subsidiaries to adapt to changing conditions in the automotive industry. At its core are a leaner product portfolio firmly focused on customers and markets, and an organization realigned accordingly,” the Volkswagen blog post said.

Audi Looks To Georgia

While all that is happening in Germany, the Audi division of Volkswagen Group is about to begin construction of a new factory in Georgia. Of course, the so-called president couldn’t resist taking all the credit, but there is no doubt the punishing tariffs he imposed on German-made cars has walloped both Audi and Porsche in the form of decreased sales. BMW and Mercedes have had assembly plants in the US for years, but Volkswagen currently builds only the Atlas SUV at its factory in Chattanooga. Volkswagen has had limited success building cars in America since it acquired a former Chrysler factory in Westmoreland County, Pennsylvania in the 1970s.

According to the New York Times,  Audi will invest $4 billion to build a factory south of Macon, Georgia. When completed, it will have the ability to manufacture 200,000 cars a year. Clearing and grading the earth where the factory will be built is expected to begin this year, with production targeted for 2031. Audi will produce sport utility vehicles at the new factory, said Audi CEO Gernot Döllner.