Posted on 06 Sep 2024
Volkswagen’s announcement this week that it is considering closing factories in Germany for the first time in its 87-year history has been met with criticism from labour unions.
The German automaker announced the decision on Monday, as part of a cost-cutting drive. The company said it was also ending a job security programme that was set to run until the end of 2029.
“The situation is extremely tense and cannot be overcome by simple cost-cutting measures,” Volkswagen brand chief Thomas Schaefer was quoted by reports as saying.
VW Group ceo Oliver Blume reportedly noted that the European automotive market is in a “highly challenging and serious position,” adding: “The economic environment became even tougher, and new competitors are entering the European market. In this environment, we as a company must now act decisively.”
At a meeting between executives and workers on Wednesday at Volkswagen's Wolfsburg headquarters, Volkswagen management was met with shouts of “Auf Wiedersehen” – German for goodbye.
In a statement seen by Kallanish Power Materials, German metalworkers’ union, IG Metall announced “bitter resistance.” The reasons for the company’s crisis “are not personnel costs, but management mistakes,” it notes.
Daniela Cavallo, chair of VW’s works council and a member of IG Metall told employees: “Volkswagen is not suffering from its German locations and German personnel costs. Volkswagen is suffering from the fact that the management is not doing its job.”
IG Metall also criticised the company’s decision to end the agreement on job security.
“The employees will not accept wage cuts or their jobs as a result of you making the wrong decisions for years!,” says Christiane Benner, first chairwoman of IG Metall. “IG Metall stands by the employees and the works council, we will fight together against the company’s excessive plans.”
The automaker has not specified which sites could be shut down or how many jobs would be impacted. Kallanish has contacted the company for comment.
According to Schmidt Automotive Research’s analyst, Matthias Schmidt, an overcapacity and underutilisation of around 400,000 units, or roughly two production plants, is to blame.
“With four years since Covid and no sign of a rebound to a 14-15 million total European passenger car market on the horizon under the current macroeconomic constraints, one doesn’t have to look much further to see the rationale behind Blume, Schäfer and likely the Porsche and Piëch family’s decision,” he comments. “Daniela Cavallo would be wise to take a look at the hard numbers!”
Source:Kallanish Power Materials
