Volkswagen Group to shut three factories amid falling EV demand
Volkswagen is to close three factories in Europe and cut thousands of jobs as its union leader delivers a stark warning to the national government – take immediate action, or ‘German industry will go down the drain’.
Daniela Cavallo, Volkswagen’s works council head, fired the message to chancellor Olaf Scholz as she told employees that the carmaker was to lay off tens of thousands of staff and shrink its remaining plants in its home nation – with factory closures on home soil for the first time.
‘Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round,’ said Cavallo at a speech to whistling and horn-blowing workers in VW’s hometown of Wolfsburg.
‘This is the plan of Germany’s largest industrial group to start the sell-off in its home country,’ she added, not specifying which plants would be affected or how many of Volkswagen Group’s 300,000+ employees could be laid off.
Unions threatened to break off talks with management and exercise their right to strike after December 1, as Volkswagen said in a statement that it would make proposals for how to cut labour costs on Wednesday, October 30, when workers and management meet for the second round of wage talks and the carmaker releases third-quarter results.
VW says it faces a need to restructure urgently thanks to high energy and labour costs, stiff competition from new and existing Asian brands and weakening demand in European and Chinese markets, as well as a slow take-up of electric cars across Europe.
Cavallo also told workers that Volkswagen plans to cut salaries by at least 10% and freeze pay for the next two years.
‘The situation is serious and the responsibility of the negotiating partners is enormous … Without comprehensive measures to regain competitiveness, we will not be able to afford essential investments in the future,’ Volkswagen Group board member Gunnar Kilian said.
Thomas Schaefer, who heads the Volkswagen brand with VW Group, said German factories were not productive enough and were operating 25-50% above targeted costs.
Unions have a lot of power within the company, holding half the seats on the supervisory board.
‘If VW confirms its dystopian path on Wednesday, the board must expect the corresponding consequences on our part,’ the IG Metall union’s negotiator Thorsten Groeger said, underscoring the likelihood of strikes before the end of the year.
Germany is currently in recession, with chancellor Olaf Scholz behind in the polls ahead of elections due next year.
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