VW Nears Deal With Unions That Would Keep German Car Plants Open

(Bloomberg) -- Volkswagen AG and labor leaders are moving closer to an agreement to restructure the automaker’s namesake brand without shuttering factories in Germany, according to people familiar with the matter.

Management is willing to keep plants running and reinstate job security agreements until 2030 in return for workers foregoing bonus payments, said the people, who asked not to be named because the discussions are private.

Additional cost-cutting measures discussed include moving production of the Golf hatchback from Germany’s Wolfsburg factory to Mexico, and ending production of VW-branded electric vehicles in Zwickau to trim capacity, the people said.

The details of an agreement could change and the talks, which are ongoing, may still end without a deal, they said. Both sides have been holding a fifth round of talks since Monday.

Spokespeople for Volkswagen and IG Metall declined to comment.

An agreement would prevent widespread walkouts and hand Chief Executive Officer Oliver Blume the fresh start he’s seeking to turn around Europe’s biggest carmaker. VW is trying to reduce costs and excess capacity across its German production network as it confronts dwindling market share in China and slowing demand for electric vehicles in Europe and the US.

The company has floated measures including laying off workers, cutting wages and closing three German factories to help save €17 billion ($17.6 billion) at the VW brand.

The talks dragged into a fourth day on Thursday in part because of their complexity. Negotiations center not just on wages across the VW brand but also on model planning across VW’s factory network and the company’s five-year investment planning process.

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