Germany's Labor Minister Hubertus Heil has announced plans to extend the Kurzarbeitergeld (short-time work allowance) from 12 to 24 months to address Volkswagen's ongoing crisis.

The move aims to preserve jobs, prevent layoffs, and support future investments at VW's facilities.

The decision, set to be approved by the cabinet, is part of a broader strategy to stabilize employment during economic challenges.

Volkswagen has proposed a 10% wage cut and other cost-saving measures, citing financial difficulties.

However, Heil remains optimistic about avoiding layoffs and closures, emphasizing the need for cooperation between management and unions.

IG Metall, a major labor union, welcomed the extension, noting it provides workers with some security while urging companies to focus on innovation and job retention.