VW denies agreement with labor representatives but says progress has been made

Investing.com -- According to a report from The Wall Street Journal on Friday, Volkswagen (ETR:VOWG_p ) dismissed reports that it has reached an agreement with labor representatives in Germany on a restructuring plan for its domestic operations. 

However, the automaker is said to have confirmed that negotiations are progressing, according to the WSJ.

The update follows weeks of discussions between VW and its worker representatives over proposed cost-cutting measures aimed at addressing a €4 billion shortfall in the company’s bid to achieve a 6.5% EBIT margin for its namesake brand by 2026. 

Talks have reportedly been focused on potential pay reductions, capacity cuts, and bonus eliminations, measures that unions have firmly opposed, warning of extensive strikes in the new year if an agreement is not reached.

German newspaper Handelsblatt reported that a compromise had been struck. The report claimed the proposed plan includes the sale of the Osnabrück plant and the closure or repurposing of the Dresden facility, while avoiding broader redundancies or changes at other plants like Emden and Zwickau.

Despite these claims, the WSJ reported that Volkswagen has denied that a deal has been finalized. 

Analysts have noted the significance of any potential compromise. Barclays (LON:BARC ) highlighted that a €4 billion savings plan, as suggested by Handelsblatt, could mitigate risk and help VW achieve its financial targets, calling such developments "positive event risk."

 

Source: Investing.com