Autoeuropa to halt production for 70 days to adapt factory to new model

Autoeuropa will have to shut down for 70 days, in addition to the usual shutdowns, for maintenance, restructuring and electrification of the Palmela factory. Workers have already accepted that the company will resort to layoffs.

About two weeks ago, the company presented the Workers’ Commission (CT) with the production calendar for 2026, “which includes significant stoppages”, according to the CT’s statement on 9 December. This stoppage is expected to last 70 days, according to ECO’s findings, in addition to the normal days of stoppage that the factory has every year. For example, Autoeuropa will shut down between 19 December – although there will still be shifts working at the weekend – and 12 January.

When presenting the calendar for next year, management suggested several legal tools that could be used during stoppages: temporary closure and reduction of activity; lay-offs; AE17; or AE15 (different types of working hours). However, the workers are advocating for the current schedule (AE19) to be maintained, “as well as the workers’ income (base salary and shift allowance)”, similar to what was done in previous years, namely when it was necessary to make a stoppage for painting works in 2024.

As the “initial proposals were more detrimental to workers”, the CT accepted the use of lay-offs, with the company committing to pay a slightly higher share. The lay-off rules stipulate that Social Security is required to pay 46.6% of the worker’s remuneration, who, in turn, loses 33% of their salary. The remainder (20%) is paid by the company. However, in the preliminary agreement, it was established that the company would guarantee 28.4% of the salary and shift allowance of workers on lay-off, with the remaining 25% compensated through down days — which, in practice, are also paid by Autoeuropa.

This was the solution found in 2024, as part of a restructuring programme to produce new models and decarbonise the factory. However, Autoeuropa was responsible for paying 33.4% of the salary and shift allowance to workers on lay-off. This was the “first step for Volkswagen Autoeuropa to reduce CO2 emissions by around 85%, thus aligning itself with the Volkswagen Group’s Zero Impact Factory strategy”, the company explained last year.

“The Workers’ Commission believes that there is no justification for reducing shifts, teams or workers, especially at a time of investment and growth at Volkswagen Autoeuropa. All workers are essential for the coming years, and past experience shows that there are solutions to cope with periods of lower production”, the same statement reads.

Autoeuropa will enter a new phase with the start of production of the new T-Roc hybrid. For now, the Palmela factory is the only one in the world to assemble this model with an internal combustion engine, but it will have a kind of transition model that will culminate in the future 100% electric ID.Every1 model, which Portugal has already secured and should be on the market in 2027. It is a four-seater, fully electric vehicle with a starting price of €20,000.

But the assembly line needs to be prepared, and the stoppages will serve precisely that purpose. And that’s not all, as Autoeuropa is going to build a new paint shop for the cars it produces, replacing the consumption of natural gas in the drying ovens with electricity, a feature that led Autoeuropa to leave the PRR consortium for violating environmental rules.

As part of this decarbonisation investment plan, Autoeuropa will receive €30 million in EU support to leverage an investment of €300 million.

Workers demand 15% pay rises

The CT has not yet reached an agreement with management on pay rises for next year. On the table is a demand for a 15% pay rise with a minimum of €150, the proposal approved by the workers in plenary and which exceeds the 9% with a minimum of €140 suggested by the CT.

However, for now, there is a preliminary agreement that there will be no redundancies during 2026, with non-production days (down days) set for 16 February, 30 November and 7 December, in addition to the night shift on the Monday after Easter being considered a non-production shift. On the other hand, there is already an agreement for the usual shutdown at the end of December 2026, but it has not yet been decided how many days there will be in January.

The company will now “contribute a maximum of 4% of the pensionable salary to all workers who are members of the pension fund”, in line with the worker’s contribution. In other words, if the worker contributes 1%, the company will match the contribution; if the worker contributes 2% to 3%, Autoeuropa will contribute 2%. This percentage rises to 3% if the employee contributes 4% to 7% to the pension fund and to 4% if the contribution is around 8% to 10%.

Positive balances from previous years’ down days may be channelled into the pension fund, “in the same way as the amounts available in the compensation time account, which is already covered by the Pension Fund regulations”, and “down days from the previous year (paid in January) can be converted into contributions to the pension fund, exempt from Social Security and without monthly income tax withholding, although they are included in the annual tax return”, according to the Workers’ Commission statement.

The CT again suggested to the administration the creation of a “demographic plan” to support the departure of workers close to retirement age (over 58 years of age or 40 years of contributory career). But the company has not yet accepted. It should be remembered that in 2022 there was a redundancy plan.

Another issue on which a preliminary agreement has already been reached is health insurance. Additional coverage for serious illnesses will be included, to be implemented in July 2026, the ceiling for childbirth will be increased from €500 to €700, to be implemented in July 2026, and, during the term of the agreement, deductibles will not be increased and ceilings will not be reduced.

The issues on which a preliminary agreement has already been reached will still have to be validated by the workers in plenary session. Only then will there be a final agreement.