Volkswagen Employees Express Strong Dissatisfaction With Management Over Potential Factory Shutdowns.

Published on 05 September 2024, by Marine Beaumont |Germany. 

Volkswagen's works council has sharply criticised the company's leadership for considering plant closures, posing a threat to job security. The company's Chief Financial Officer has warned that Volkswagen may not survive the shift to electric vehicles without significant cost reductions.

During a gathering at the Wolfsburg plant on Wednesday, works council chairperson Daniela Cavallo delivered a scathing rebuke of the executive board. She accused management of failing in its duties following discussions of possible factory closures in Germany, the strongest economy in Europe.

"Our issue is not labour costs or staffing," Cavallo said, addressing the board in front of thousands of workers. "The problem lies with an executive board that is neglecting the core business. The workforce should not be made to pay for your mistakes."

Volkswagen has stated that cost-cutting measures are necessary for the company to survive the challenges posed by a weakened economy and fierce competition from China in the electric vehicle market.

Cavallo questioned the management's proposed solutions, saying, "Is your answer to close factories, lay off workers, and cut wages? Such actions would only make sense if the entire business model was doomed."

Volkswagen employs nearly 700,000 people, many of whom benefit from secure work conditions established through agreements in the 1990s. Chief Financial Officer Arno Antlitz has urged employees to accept the proposed cuts.

"Is the business model truly dead? If so, Dr. Antlitz, where is the formal announcement to the financial markets?" Cavallo challenged.

Another setback for the German government:

Volkswagen, Europe's largest car manufacturer and the parent company of brands like Audi and Skoda, is aiming to save €10 billion. Previous measures, including a hiring freeze and layoffs of temporary staff, have not been sufficient.

The prospect of plant closures adds further pressure on Germany's coalition government, as the nation's economy is heavily reliant on the automotive sector. With two eastern German states recently showing strong support for the far-right Alternative for Germany party, experts are calling for government intervention.

Despite this, the situation could present an opportunity for Chancellor Olaf Scholz. With his popularity declining due to conflicts within the coalition, this challenge might allow him to demonstrate his leadership by enacting policies that would ease the transition to electric vehicles.