Volkswagen announces cuts and layoffs. The German car giant has announced plans to liquidate its factories and end job security. The reason for these decisions is the financial situation and the crisis in the European car market.
Volkswagen Group, a concern that also includes, among others, Audi, Seat, Skoda and Lamborghini brands, considers closing factories in Germany for the first time in 87 years.
For now, it is not known which factories would suffer such a fate, but in the past, analysts have pointed to factories in Osnabrück (Lower Saxony) and Dresden (Saxony) as potential targets for closure.
What’s more, it employs more than 650,000 people, the German automotive giant also plans to end its decades-old jobs guarantee, avoiding job cuts until 2029, at six of its plants.
The IG Metall union says such guarantees cover plants in Wolfsburg, Hannover, Braunschweig, Salzgitter, Kassel and Emden.
The media emphasizes that it is another step towards increasing cost cutsbecause the plans already assume savings of around 10 billion dollars. The “Deutsche Welle” portal writes that by 2026, the Volkswagen Group wants to achieve a profit margin of 6.5 percent, with 2.3 percent. in the first half of this year.
Reuters, for its part, notes that the consideration of plant closures is the first serious conflict between the current chairman of the Volkswagen Group, Oliver Blum, often described as a man who can reach compromises, and the unions, which have significant influence in the company.
On Wednesday, as part of announcements by the Volkswagen Group management about cost cuts and job cuts, the German car giant’s chief financial officer met with employees at the company’s headquarters in Wolfsburg. Around 16 thousand people participated in the event. people.
The meeting, as “Deutsche Welle” emphasizes, was stormy. When Arno Antlitz took the stage, many of the workers gathered began to whistle and shout: “We are Volkswagen, not you” and “auf wiedersehen (German: goodbye – editor’s note)”.
The CFO said, among other things, that: The European car market has shrunk significantly following the Covid-19 pandemicand the company faces a demand deficit of approximately 500,000 vehicles, which corresponds to two factories. The market simply doesn’t exist – he said at the meeting.
He added that the company has “one, maybe two years” to “change its fortunes”. He stated that the joint responsibility of employees and management is to adapt production, including with regard to the transition to electric cars. This – according to Antlitz – would require cost cuts.
In response, the head of the works council, Daniela Cavallo, stated that Management ‘significantly damaged confidence’ and She compared the threat of closing the factory to “declaring bankruptcy.”. He also called on Volkswagen Group boss Oliver Blume to explain to employees why his priority was to spend 5 billion euros on software cooperation with US start-up Rivian, and not to protect jobs in Germany.
“Deutsche Welle” notes that the problems at Volkswagen are, in a way, a symbol of the problems that German companies face. Inflation, lower demand for exports, higher production costs and greater external competition have caused this situation. There are growing questions about the condition of Europe’s largest economy.
