Christmas Miracle: Volkswagen's Survival Deal Halts Strikes

Volkswagen, in a significant agreement with unions, announced 35,000 job cuts and reduced capacities to stay competitive against Chinese rivals. The deal, preventing strikes and site closures, ensures no immediate layoffs, with savings expected to reach 15 billion euros annually.

Volkswagen has finalized a crucial agreement with the unions in Germany, averting potential strikes. More than 35,000 jobs will be cut and production capacities reduced as part of the automaker's bid to remain competitive against cheaper Chinese rivals.

The deal was termed a 'Christmas miracle' by union leaders, emphasizing that there will be no immediate plant closures or layoffs. Despite the 5% wage increase suspension, Volkswagen aims to save 15 billion euros annually, without affecting its 2024 fiscal predictions.

Top executives and union leaders underwent 70 hours of arduous negotiations, resulting in this agreement. Key shifts will see production moving to Mexico, while the Dresden plant will shut by 2025. This decision underscores the wider issues of economic challenges and political uncertainty in Germany.

(With inputs from agencies.)