Train and railway manufacturer Bombardier and German worker representatives said Wednesday they had reached a deal that would see the firm shed some 2,200 jobs but stop site closures.
The posts are set to fall away at Bombardier by 2020 through voluntary redundancies and ending temporary contracts, the firm and union IG Metall said.
Meanwhile three factories in the east of the country producing rolling stock will heighten their specialisation in different stages of manufacturing.
Voluntary job losses "could not be avoided given the business situation," IG Metall regional leader Olivier Hoebel said in a statement, but would be "implemented in a socially manageable way".
"With this programme, Bombardier will become significantly more efficient and thus more competitive," Bombardier's rail chief in Germany Michael Fohrer said.
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The deal marks the end of two years of hard negotiations between executives and worker representatives, after bosses' 2016 announcement that they planned to slash 5,000 jobs worldwide.
Unions' protests drew the attention of the German government, which convinced the two sides to seek a compromise.
Today's agreement also includes a mechanism for joint decision-making with workers that would "create the conditions to future-proof jobs and sites beyond 2020," works council chief Juergen Korstian said.
The German deal follows an October 2017 promise from French Economy Minister Bruno Le Maire that no Bombardier sites would close in France.
Canadian-owned Bombardier is looking to stay on the rails in Europe as it confronts a major new competitor formed from a merger of France's Alstom and the rail activities of German industrial giant Siemens.
Alstom-Siemens' tie-up was itself a response to increased competition from Chinese champion CRRC.
Bombardier Transport France chief Laurent Bouyer told AFP in October he was "not necessarily convinced" the firm would need to seek mergers of its own to contend with other manufacturers' size.
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