Due to the tense situation, the VW Group is tightening its austerity measures – including factory closures and layoffs. The Volkswagen works council is taking to the barricades.
As part of its austerity program, Volkswagen is no longer ruling out plant closures and redundancies. As the company announced after a management meeting, it is also ending the previous job security arrangements, which ruled out redundancies until 2029.
VW board: Planned job cuts are not enough
This is what the board says: The brands within Volkswagen AG would have to be comprehensively restructured. “In the current situation, closures of vehicle production and component sites can no longer be ruled out without rapid countermeasures.” In addition, the previously planned job cuts through partial retirement and severance payments are no longer sufficient to achieve the targeted savings targets.
CEO Oliver Blume: “The European automotive industry is in a very difficult and serious situation. The economic environment has become even more difficult, and new suppliers are pushing into Europe,” he said in a statement. “In addition, Germany in particular is falling further behind in terms of competitiveness. In this environment, we as a company must now act consistently.”
The problem: The core brand Volkswagen has been struggling with high costs for years and is far behind sister companies such as Skoda, Seat and Audi in terms of returns. A savings program launched in 2023 should bring about a turnaround here, improving earnings by ten billion euros by 2026. However, the currently weak new business has now further exacerbated the situation.
Where to get four billion?
In order to achieve the targeted improvements in results, costs would have to be reduced more than previously planned. According to Handelsblatt, up to four billion euros would have to be saved.
The consequences: “Against this background, the company sees itself forced to terminate the job security that has been in place since 1994,” the management board said.
This is what the employee representative says: Works council chairwoman Daniela Cavallo announced massive resistance in a special edition of the works council newspaper “Mitbestimmen”. The plans are “an attack on our employment, locations and collective agreements. This puts VW itself and thus the heart of the group at risk. We will fight bitterly against this. With me there will be no VW location closures!”, said Cavallo.
Majority in the VW Supervisory Board
At VW, employee representatives, together with the state of Lower Saxony, have a majority on the supervisory board. In order to implement its plans, the VW board therefore needs the support of the works council.
Source: Stern
