Valeo Strike Avoided in Thuringia as Workers Secure Nine Extra Months and €20,000 Floor

Workers at Valeo’s Mühlhausen plant have traded a 2027 shutdown for a guaranteed minimum severance and a state-backed job transition programme, ending months of uncertainty at the French auto supplier’s German outpost.

The social plan signed on Thursday covers all 163 remaining employees. Instead of closing on 31 March 2027 as originally scheduled, the Thuringian factory will now halt production on 31 December 2027 – nine months of additional employment that the union says “takes the immediate pressure off families.”

Each worker receives at least €20,000 in severance. IG Metall members get an extra €4,000. The core of the deal is a transfer company where former employees can stay for up to twelve months, earning 80% of their previous salary while receiving training and job-placement support.

Growth Elsewhere, Shrinkage in Mühlhausen

The plant’s shutdown stands in sharp contrast to Valeo’s corporate trajectory. The company’s stock jumped in early June as analysts pointed to rising demand for cooling solutions used in AI data centres. First-quarter 2026 revenue reached €5.1 billion, representing organic growth of 1.3%.

Yet Valeo continues to face heavy cost pressure, which the company cited as the reason for consolidating the Mühlhausen site. The social plan is designed to cushion the blow for a workforce that remains in limbo until the end of 2027.

German Auto and Heavy Industry Under Twin Strain

Valeo is far from alone. The BMK Group is winding down its Baden-Württemberg operations by the end of June. Dow Chemical in Stade is cutting more than 100 jobs. Volkswagen is preparing a sweeping model rationalisation: CEO Oliver Blume wants to slash current variants from over 150 to fewer than 100, with the fate of plants in Zwickau, Emden and Hannover still under discussion.

Salzgitter offers a rare bright spot – the works council there has ruled out site closures for now under existing agreements, as the company pivots toward battery-cell production. But even that plant faces operational headaches. Salzgitter AG has had to throttle output because construction sites on Deutsche Bahn’s rail network are blocking raw-material deliveries.

The combined pressure of industrial restructuring and crumbling infrastructure is forcing a growing number of German factories to either shrink or reinvent themselves. For Valeo’s Mühlhausen team, the social plan at least buys time – and a payout.

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