Volkswagen said the deal would allow savings of €15 billion annually in the medium term and saw no significant impact on its 2024 guidance.

While there were no immediate closures, the company said it was looking into options for its Dresden plant and repurposing the Osnabrück site, including looking for a buyer. Some production would be relocated to Mexico.

“No site will be closed, no one will be laid off for operational reasons and our company wage agreement will be secured for the long term,” said works council chief Daniela Cavallo.

Süddeutsche Zeitung however reported Sunday that around 4,000 Volkswagen managers will face income reductions under the agreement.

Starting in 2025 and 2026, their salaries will decrease by 10 percent compared with current levels. The reduction will gradually lessen in the following years, with this adjustment remaining in place until 2030.

Volkswagen has been in talks with unions since September about steps needed to compete with cheaper Chinese rivals, tackle weak demand in Europe, and deal with slower-than-expected growth in electric vehicle sales.

In late October, the company announced for the first time its intention to close at least three plants in Germany and downsize all remaining factories.

Tommaso Lecca contributed reporting.