Austerity despite billions in profits
At VW “they exaggerate a bit”
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Volkswagen is canceling a job guarantee that has been in effect for decades for its core brand. For the first time there are even factory closures in Germany for discussion. The group is by no means in an acute crisis, says industry expert Frank Schwope from the University of Applied Sciences for Medium-Sized Businesses in Hanover. He sees a lot of “negotiation folklore” among both company management and employee representatives.
ntv.de: Savings programs including site closures are nothing unusual for most large corporations, but this is completely different for VW. How should yesterday's announcement be classified?
Frank Schwope is a long-time expert in the German automotive industry and lecturer at, among other things, the University of Applied Sciences for Medium-Sized Businesses in Hanover.
(Photo: Frank Schwope)
Frank Schwope: There hasn't been such a large number of job cuts at Volkswagen in decades. But the whole thing is also exaggerated to a certain extent. After all, the group has made hefty profits in recent years and this year there are likely to be significant billions in profits left over. The possible termination of job security or the closure of plants are very sensitive topics.
The public and employees were surprised by the announcement of these drastic considerations. Were there no signs that something of this magnitude was coming?
The scope has built up in the last few months or years. Serious job cuts were delayed for years. On the contrary: the group has become increasingly larger in recent years. If you then consider that the former CEO Herbert Diess even wanted to build a new factory in Wolfsburg, then you are quite perplexed.
The measures that the company management is now announcing or are keeping open sound dramatic. Is VW really doing so badly?
The group is not in a dramatic crisis; after all, it earned 22.6 billion euros from operations last year. Billions will remain at the end of this year. However, it is always more pleasant to save in good years than in bad years. This supposed drama is part of the folklore of negotiations between the board of directors and the works council.
Is the group management just saving up against the problems or is there also a long-term plan to actively shape the future?
In the next few years, austerity measures will accompany all companies in the automotive industry, with the car manufacturers being even better positioned than the suppliers. The automotive industry is of course very dependent on political decisions, such as those regarding electromobility, and must always adapt to changes or market conditions. In this respect, plans can become waste very quickly.
The works council took the board's announcement as a declaration of war. Is VW now facing an open power struggle?
These verbal statements are part of negotiation folklore and should not be overrated. At least the Volkswagen Group is still in the black.
Can the huge corporation with its complex structure still be reformable?
This brand conglomerate is indeed difficult to control. In particular, the group does not need the Traton truck division or the Ducati brand. A sale would bring money into the coffers and the board would be relieved in this regard.
Max Borowski spoke to Frank Schwope
