VW reaches deal to avert mass strikes

Volkswagen announces job cuts and capacity reductions in deal with unions to avert strikes and stay competitive.

HANOVER, GERMANY:

Volkswagen on Friday announced sweeping changes to its German operations, including more than 35,000 future job cuts and sharp capacity reductions in a last-gasp deal between Europe's top carmaker and unions to avert mass strikes.

Union leaders hailed the agreement as a "Christmas miracle" after 70 hours of gruelling negotiations, the longest in the company's 87-year history. There would be no immediate site closures or layoffs, and VW appeared to have backed away from demanding 10% wage cuts.

The deal avoiding costly strikes may also provide relief to investors after months of negotiations. Shares rose 2.4% in extended trade after the deal. They have lost 23% this year. Volkswagen has been in talks with union representatives since September over measures it called necessary for it to compete with cheaper Chinese rivals and handle lacklustre demand in Europe and slower-than-expected adoption of electric vehicles.