VW management informs workforce
“There are no sales for two works – the market is no longer there”
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Because demand for new cars is falling significantly and money needs to be freed up for new investments, the company's management has announced a drastic austerity program. Even the closure of factories is on the table. The works council chairwoman wants to resist.
The VW management defended its stricter austerity measures at the company meeting in Wolfsburg. “We still have a year, maybe two years, to turn things around. But we have to use this time,” said Group CFO Arno Antlitz in front of more than 10,000 employees at the VW plant. “We have been spending more money on the brand than we earn for some time now. That's not going to work in the long run!”
VW wants to use the savings to free up the funds needed for new products. “We need money now to invest heavily,” said brand boss Thomas Schäfer. “If we now manage to reduce our costs sustainably and invest in a model explosion that the competition and customers have never seen before, then we will be the ones who have created the conditions so that the next generations can also work for Volkswagen here in Germany.”
With regard to the locations, Antlitz referred to overcapacity. In Europe, two million fewer cars are currently being sold per year than before the corona pandemic. And that is unlikely to change. For VW, with a market share of around a quarter in Europe, that means: “We are missing the sales of around 500,000 cars, the sales for around two plants. And that has nothing to do with our products or poor sales performance. The market is simply no longer there.”
VW did not provide any information about possible locations that could close. The group had previously stated that plant closures would only be the last resort if rapid countermeasures were not taken. VW operates car plants in Wolfsburg, Emden, Osnabrück, Hanover, Zwickau and Dresden, as well as component factories in Kassel, Salzgitter, Braunschweig and Chemnitz.
The management board was greeted with sharp protests from the employees. VW did not provide any new details about the tightened savings plans on Monday at the invitation of the works council. Europe's largest car manufacturer had announced that it would tighten the austerity measures it had taken in view of the worsening situation. The closure of individual plants and redundancies for operational reasons are no longer being ruled out.
The works council and IG Metall had already announced considerable resistance. “Cutting costs, closing plants, making redundancies. That is (…) not the Volkswagen culture,” explained Daniela Cavallo, chairwoman of the general and group works council, and called for a master plan up to 2035. In the VW family, things have always been solved differently. “In partnership, despite conflict! You want to say goodbye to that,” said Cavallo to management. “Anyone who wants to break with our DNA will face bitter resistance from the workforce.”
Cavallo pointed out the importance of the VW plants for the cities in which they are located. “It's about everything.” VW is not suffering from its German locations and personnel costs, the company is suffering from the fact that the management board is not doing its job. “If you're constantly standing with your back against the wall, you won't be able to get a team behind you. And one thing is clear: without this workforce, we will not get out of this crisis.”
With the works council, there will be no plant closures or early terminations in Germany. Instead, work must be done on fundamental issues such as product and technology orientation, sustainable plant capacity utilization, and technological leadership. “Technical development must be strengthened and take on a leadership role,” said Cavallo. In addition, the battery system must be further developed and, above all, leadership must be improved. “The coordination and decision-making processes in the interaction between the Group, the brand, and Volkswagen AG are total chaos,” said Cavallo.
