One of the world’s largest car manufacturers could shut at least three of its plants, potentially resulting in the loss of tens of thousands of jobs, following several major risks to the business.
In recent months, Volkswagen has explained to its employees that global factors, including the slow uptake of electric vehicles and the rise of Chinese EVs in Europe, have hampered profits.
VW has been negotiating with unions over potential plant closures, which would represent the first closure in the brand’s 87-year history.
Speaking to employees in Wolfsburg earlier today, Daniela Cavallo, Chairwoman of the General and Group Works Council of Volkswagen AG, said VW’s management has a “clear intention” to cut tens of thousands of jobs across the company.
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Daniela Cavallo, Chairwoman of the General and Group Works Council of Volkswagen AG, speaks to employees
REUTERS
She added: “Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round.
“This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany,” Reuters reported.
The Wolfsburg-based manufacturer originally told staff in September that it was looking into the viability of closing at least one vehicle manufacturing plant and one component factory.
Volkswagen has a number of prominent sites across Germany including Brand Group Core in Wolfsburg, Brand Group Progressive with Audi in Ingolstadt and Brand Group Sport Luxury with Porsche in Stuttgart-Zuffenhausen.
Reuters also reported that Cavallo urged Berlin to urgently come up with a masterplan to ensure it does not “go down the drain”.
Footage from the plant shows hundreds of workers from the IG Metall union protesting outside with signs and placards. Some of them are telling the company to “get their hands away”, while others call on CEO Thomas Schäfer to “do his homework”.
Thomas Schäfer said in a statement: “We are not earning enough money with our cars currently. At the same time, our costs for energy, materials and personnel have continued to rise. This calculation cannot work in the long term.
“So we have to get to the root of the problem: we are not productive enough at our German sites and our factory costs are currently 25-50 per cent higher than we had planned.”
In a statement to Reuters, Volkswagen reiterated that “comprehensive restructuring measures” were needed to make the company competitive in the long term, although did not provide any specific details.
It said: “This is the only way to finance further investments in the future from our own resources.”
In the UK, VW remains the best-selling brand this year, with more than 128,500 vehicles sold, representing an impressive 8.5 per cent of the total market share.
This is also an increase of 5,000 additional vehicle registrations compared to the same time last year, while also outselling some of its biggest rivals.
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The move has been met with severe criticism from employees at the Wolfsburg plant
REUTERS\
A German Government spokesperson confirmed that it would continue to monitor the events, as well as remain in communication with Volkswagen and representatives for the employees.
They added: “It is well known that Volkswagen is in a difficult situation. (…) The Chancellor’s position on this is clear, namely that possible wrong management decisions from the past must not be at the expense of employees. It is now a matter of preserving and securing jobs.”