Car manufacturer in crisis: VW justifies austerity measures: “The situation is serious”

Following the latest announcements from the VW works council about possible plant closures and job cuts, the group has once again defended its savings plans, but is not providing any details about specific measures. “The fact is: the situation is serious and the responsibility of the negotiating partners is enormous,” said Human Resources Director Gunnar Kilian, according to the statement. “Without comprehensive measures to regain competitiveness, we will not be able to afford significant investments in the future.”

Kilian did not provide any specific information about the plans for plant closures, wage cuts and job cuts previously mentioned by works council boss Daniela Cavallo. “We are sticking to the principle agreed upon with co-determination that the discussion about the future of Volkswagen AG should first be conducted internally with our negotiating partners,” he said. The group announced “concrete proposals to reduce labor costs” for the collective bargaining round scheduled for Wednesday.

Brand boss: “We can’t continue as before”

Brand boss Thomas Schäfer justified the move with the high costs at the German locations. “We cannot continue as before,” said Schäfer, according to the statement. “We are not productive enough at our German locations and our factory costs are currently 25 to 50 percent higher than we had planned. This means that individual German plants are twice as expensive as the competition.” The goal remains to increase the return on sales to 6.5 percent by 2026. This is the only way to finance the necessary investments in the future.

According to the works council, VW wants to close at least three plants in Germany and cut tens of thousands of jobs. In addition, the wages of the 120,000 employees paid according to the in-house tariff should be reduced by a flat rate of ten percent.