Porsche AG secured the jobs of its 8,600 workers in Germany for five more years in exchange for an assurance from labor to increase productivity more than 6% every year. In a statement, outgoing Porsche CEO Michael Macht said that the carmaker is now confident that it will be able to continue to raise its revenue and earnings in the coming years.
In return for continued flexibility and productivity growth in Germany, Porsche plans to invest hundreds of millions of euros in its three German sites in Stuttgart, Weissach and Ludwigsburg.
If Porsche's board approves a small version of the Cayenne as a brand new fifth model line next week, this amount could increase to as high as 1 billion euros ($1.29 billion).
Porsche's previous management under Wendelin Wiedeking nearly bankrupted the firm in its attempt to acquire the much-larger Volkswagen AG. As a result, Porsche lost its independence to Volkswagen AG. Wiedeking was later replaced with VW's CEO, Martin Winterkorn.
Starting next month, production of the Boxster cabrio (currently built at Finland's Valmet Automotive) will be moved permanently to Stuttgart, helping to fill up unused capacity in the plant through 2015. In addition, by early next year, Valmet will also only supply the painted car bodies of the Boxster-derived Cayman coupe, which will then be assembled in Stuttgart.
Porsche labor leader Uwe Hueck said that he fears that extra shifts will have to be added in January.
He anticipates that Stuttgart's daily output will climb up to 200 sports cars each day from a current rate of 140 units. He said that Porsche is likely to maintain the double-digit operating margin achieved in the first nine months in the fiscal year ending this month.