The Volkswagen Group is currently undergoing one crisis meeting after another. This was also the case this week, when several thousand managers joined together for “Management Information”, a digital information session for top executives. We have to reduce costs, there is no other way, confirmed Arne Meiswinkel, HR Director of the VW brand, and Gunnar Kilian, top HR manager in the group, as participants report. This was also clearly visible in the message that was then sent to all employees that VW wants to keep the pressure high. “We must not waste any time, there is far too much at stake,” Kilian is quoted as saying. A few days ago, “technical commissions” with company representatives and trade unionists began work to find a solution to the power struggle over factory closures and the dismantling of tens of thousands to explore positions. Everything is highly complex and time is of the essence: the supervisory board meets at the end of next week. Then, we hear, the inspectors want to at least get a feeling for “whether there is a path that brings us together,” as one manager puts it. The week after, IG Metall and management will officially meet for the third round of negotiations on a new in-house tariff. A common assessment is that the positions are “far apart” and the risk of failure is high. Also because the demands of the board are tough, as is now becoming increasingly clear. Significant savings planned Two billion euros, according to internal calculations, the company representatives want to save through collective bargaining cuts, above all a reduction in wages by ten percent, zero rounds in 2025 and 2026 and fewer bonuses and surcharges. But anyone who thinks that this would prevent the closure of entire locations is mistaken. According to further calculations, the closure of a factory like Emden or Zwickau could reduce the burden on earnings by 800 million euros. The demand is being made “on top,” says an IG Metall member. If VW doesn’t get through with this, the company’s threat is that the corresponding amount would probably have to be recovered elsewhere through labor costs. This means that layoffs across the entire production network would become even more extensive. All in all, VW wants to use its efficiency program to reduce the burden on earnings by more than ten billion euros, also through a better division of tasks between the brands, fewer model variants and cheaper purchasing. VW does not comment on details of factory and labor costs. The background to the conflict is the crisis that is currently spreading throughout the entire automotive industry. Human resources manager Meiswinkel calculates that the average personnel costs of a collectively agreed employee at Volkswagen AG are 15 to 20 percent higher than the personnel costs of the metal and electrical industry in the internal communication to the workforce. In the current environment of increased competition and weak demand, VW’s position is that this is no longer justifiable. Capacity should also be reduced in order to get the utilization problems in Germany under control. What does the VW law enable? The works council opposes this and threatens escalation. Strikes are possible from December 1st. The union also warns that VW will revert to older collective bargaining rules if talks about a new company collective bargaining agreement and further agreements fail. Then, according to IG Metall, the costs would even rise. There is talk of an amount approaching the “billion mark”. Large-scale layoffs, which the works council warns about, would be possible after the termination of an employment guarantee from the middle of next year. If there is no agreement by then, discussions about a social plan would have to begin. That, in turn, is a prospect that the company is anything but pleased with. Because he sees the danger that young and qualified employees in particular will leave with this instrument. Joint solutions would be better, says a manager. But that will only exist if the cost targets are achieved. More on the subject is also the question of locations. The VW law gives employee representatives a right of veto when it comes to the “establishment and relocation” of production facilities. According to general understanding, this may not apply to the small Osnabrück location, which could soon be without work after a canceled order from the sports car manufacturer Porsche. Nothing would be “relocated” here, just discontinued. If, on the other hand, VW wants to transfer models from large plants such as Emden or Zwickau to Polish factories, all of the works council’s special rights will probably apply. Many strategists lack the imagination as to how this knot should be broken. Political backing appears to be crumbling. The usual political backing for the works council seems to be at least partially crumbling. As is well known, plant closures and redundancies “are viewed very critically by us,” said Lower Saxony’s Prime Minister Stephan Weil (SPD), a member of the VW supervisory board, this week. However, he did not rule out per se that this could happen. We hear from the workforce that some of those responsible are already being trained in strike law and regulations for industrial action. In Wolfsburg, that much is clear, there is a threat of a fight that will drag on for a long time – and, after the end of the traffic light government in Berlin, may fall in the middle of the federal election campaign.
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