Porsche's Temporary Workforce Shuffle in Stuttgart
At Porsche's main plant in Stuttgart-Zuffenhausen, many temporary workers in the production sector are bracing for a change in scenery within the coming months. Harald Buck, the head of the Works Council, confided to the German Press Agency that approximately 600 fixed-term contracts, which cannot be renewed, will be phasing out gradually throughout the next year.
Talks are currently underway between the company management and the Works Council to identify opportunities for some of these temporary employees to transition into permanent positions, although it seems that not everyone will be able to secure a full-time role. The first employment contracts are slated to expire in January.
Porsche's temporary employment contracts can pave the way for a permanent job within the company, as demonstrated by its impressive growth over the past decade. Porsche AG now boasts a workforce of 24,700 employees, including 2,400 on temporary contracts.
The growth in permanent positions came about thanks to numerous employees departing the company due to various reasons, such as partial retirement. In the years 2021, 2022, and 2023, there were a total of 1,255 temporary employees, with 1,115 employed in the production sector alone.
As Buck explained, there are no temporary workers in production; instead, they deal exclusively with fixed-term employment contracts. These employees receive the same benefits as those on collective agreements and those provided by the company.
The Zuffenhausen facility in the greater Stuttgart area will stay operational until mid-2030, with significant investments being made in expanding the body shop and creating additional logistics space. Additionally, the site will be responsible for assembling the upcoming electric-drive Boxster model in the future, following the production of the last Boxsters with combustion engines at Volkswagen's Osnabrück plant.
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Porsche's decision to phase out temporary contracts is part of a broader restructuring strategy to navigate the shifting market conditions for electric vehicles. The company is currently facing stagnating demand for electric vehicles, particularly in the Chinese market, leading to a significant drop in sales for the Taycan.
In response, Porsche is reassessing its electric vehicle production targets while increasing its focus on producing vehicles with internal combustion engines and hybrid models. This strategic shift is expected to result in additional costs of 800 million euros.
Furthermore, the company has a job security policy that safeguards operational jobs until 2030, which means compulsory redundancies are not an option during this period. The current staff reduction initiative primarily relies on voluntary severance packages and retirement incentives.
While the company is not actively pursuing forced reductions at the moment, it has not ruled out making such decisions in the future. With 1,500 fixed-term contracts expiring in 2024 and an additional 500 contract renewals waived, a total of 2,000 employees will be impacted by the initial stage of the reduction process.
Porsche is also providing temporary employees with the opportunity to transition into permanent roles through its Internation Trainee Program, which offers an avenue to pursue managerial positions during or following the training period.
By offering voluntary severance packages, encouragement for early retirement, and opportunities for temporary employees to transition into permanent positions, Porsche is balancing its workforce needs as it adapts to the evolving market conditions.
