Further talks are scheduled for Wednesday between Volkswagen’s management and labor union leaders. Volkswagen’s management wants to close at least three plants, cut tens of thousands of jobs, and cut salaries by 10% for the remaining employees, according to a statement from staff representatives.
The manufacturer also seeks to downsize all remaining plants, the document adds. This will lead to the outsourcing of many tasks and entire departments to external service providers.
“This is the plan of Germany’s largest industrial group to start selling off in its own country,” said Daniela Cavallo, chairwoman of the General Works Council, speaking at VW’s main plant in Wolfsburg.
The statement comes after Volkswagen recently issued its second profit warning in less than three months. Weak demand in the Chinese and European markets, as well as the unsuccessful transition to electric vehicles, have hit the manufacturer’s profits.
In addition to a 10% cut in salaries, there will be a two-year wage freeze in 2025 and 2026. The board also wants to eliminate the monthly collective bargaining bonus of €167 and other bonuses.
Clarity on future job losses
If the announced closure plans are implemented, it will be the first time Volkswagen has closed a plant in its home country in its 87-year history.
VW currently has 10 plants and 300,000 employees in Germany.
At the beginning of the year, the company warned that plant closures could become a reality due to increased competition from Chinese brands and slower consumer spending.
The unions are demanding more clarity on Volkswagen’s future.
“For more than a year now, the board has been unable to provide us with targets for the core VW brand… the board still shows no sign of a plan for the future,” said Daniela Cavallo.
She argues that cuts cannot be justified if there are no targets to aim for.
Cavallo also called on policymakers to develop a “comprehensive plan” for the transition to electric vehicles and to increase Germany’s viability as an industrial center.
A government spokesman quoted by Reuters said: “It is well known that Volkswagen is in a difficult situation: “It is well known that Volkswagen is in a difficult situation… The Chancellor’s position on this is clear: possible bad management decisions from the past should not be paid for at the expense of employees. It is now about saving and securing jobs.”
On Wednesday, union leaders will meet with VW representatives for a second round of collective bargaining.
When Euronews contacted Volkswagen about Monday’s events, the company emailed a previously published statement about the restructuring process. It said the cuts were intended to make the company “sustainably competitive.”
Thomas Schaefer, CEO of Volkswagen Passenger Cars, said: “We have to get to the root of the problems: we are underperforming in our German plants and our factory costs are currently 25 to 50 percent higher than planned. This means that some of our German plants are twice as expensive as our competitors.”
He emphasized that operations “cannot continue as before.”
Volkswagen also added in its email: “We are not involved in speculation around the confidential negotiations with IG Metall and the works council on collective bargaining and restructuring.”
