At the works meeting in Wolfsburg, VW management defended its tightened austerity measures and the termination of employment protection. “We still have a year, maybe two years to turn things around. But we have to use this time,” said group finance chief Arno Antlitz (55) in front of more than 10,000 employees at the VW plant. “We have been spending more money in the brand than we are earning for some time. This won’t go well in the long run!”
VW wants to use the savings to free up the funds it needs for new products. “We now need money to invest heavily,” said brand boss Thomas Schäfer (54). “If we now manage to sustainably reduce our costs and invest in model fireworks, then we will be the ones who have created the conditions for the next generations to be here too Germany for Volkswagen can work.”
Sharp protests from employees
The board was met with sharp protests from the employees. The works council saw the termination of the employment agreement, which was originally valid until 2029, and the possible closure of plants as a declaration of war. New details about the austerity plans tightened on Monday
VW did not name the company at the appearance at the invitation of the works council.
Europe’s largest car manufacturer had announced that, in view of the worsening situation, it would once again tighten the austerity measures taken at the core VW brand. Because of the low demand, brand boss Schäfer has to save around an additional 5 billion euros in order to achieve the goals.
A factory closure in Germany and redundancies for operational reasons are no longer ruled out. works council and IG Metall had announced considerable resistance, the state of Lower Saxony, which has a stake in VW, called on the car manufacturer to avoid site closures.
“We lack sales for two works”
With a view 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 in Europe of around a quarter, this means: “We are missing sales of around 500,000 cars and sales for around two plants. And that has nothing to do with our products or poor sales performance. The market simply isn’t there anymore.”
Ten plants in Germany at a glance
VW still did not provide any information about possible locations that could close. The company had previously stated that factory closures would only be the last measure if it was not possible to take quick countermeasures. VW operates car plants in Wolfsburg, Emden, Osnabrück, Hanover, Zwickau and Dresden, as well as component factories in Kassel, Salzgitter, Braunschweig and Chemnitz.
The head of the general works council at Volkswagen, Daniela Cavallo (49), announced “fierce resistance” to possible plant closures and layoffs to reduce costs during the works meeting in Wolfsburg. “Never in my life,” she said, according to the speech manuscript.
Cavallo calls savings plans “a declaration of bankruptcy”
Cavallo accused the management of the VW brand and the group of lack of ideas: “Scrubbing costs, closing plants, giving notice of termination for operational reasons” – this response to the crisis was “not just an indictment, it is a declaration of bankruptcy.”
Cavallo said that the works council shared the analysis that “we are facing serious problems here”. However, closing factories, laying off employees for operational reasons and enforcing tariff cuts are only permissible “in exactly one scenario – and that is when the entire business model has died.” But this is not the case.
Volkswagen is not suffering from its German locations and German personnel costs, but rather from “the fact that the board is not doing its job,” said Cavallo.
“Mania for regulations and documentation madness”
She called for a return “to the role of technology leadership”. Everything that is not relevant to technological leadership must be reconsidered. The complexity “has to go down, we have to address our obsession with regulations, we have to stop our documentation madness and the many double and triple processes for security”. That is the job of management.
“If there is a crisis” at the car manufacturer, then it is not just about the 120,000 employees at Volkswagen AG, Cavallo continued. “It’s about Lower Saxony. It’s about Germany.”
More on the topic
She also appealed to the “Volkswagen culture”, where problems are solved “in partnership”. If the management decides to say goodbye to this, they will have to deal with bitter resistance from the workforce.