Volkswagen wants to close at least three plants in Germany, carry out thousands of layoffs, and reduce employees' salaries by 10% to cope with the crisis it is facing. "It is an unprecedented bloodletting" in the almost 90-year history of the leading European automotive group, said the employee committee president when communicating these plans to the workers. According to the German newspaper Handelsblatt, the intention would be to reduce costs by around 4 billion euros.
"None of VW's German plants are safe from these plans," it has been assured. The brand that gives its name to the German group has around 120,000 employees in the country, where it has 10 plants, six of them in Lower Saxony, including the one in Wolfsburg. So far, Volkswagen has not commented on these reports.
In September, its management already warned about the challenges facing the automotive industry, especially regarding the slow progress of electric vehicle sales and Chinese competition, making it impossible to rule out plant closures in its home country, something that had never happened before. Likewise, it would have to abandon the job protection promise in place since 1994, which prohibited layoffs until 2029.
CEO Oliver Blume referred to the entry of new competitors in European markets, the deterioration of Germany's position as a manufacturing location, and the need to "act decisively." This had to be added to the decline of the German brand's operations in China, where it was the market leader for many years. Now, that position is held by BYD, a local manufacturer.
Volkswagen stated last month that the company's half-year results indicated that it would not achieve its goal of 10 billion euros (10.8 billion dollars) in cost savings by 2026.
The industrial union IG Metall strongly criticized VW's closure plans. "We expect that, instead of cut fantasies, Volkswagen and its management will propose sustainable concepts for the future at the negotiating table," said the regional union leader, Thorsten Gröger. Negotiations between Volkswagen and the union will resume on Wednesday.
As various executives have stated in the weeks prior, the Spanish factories of the group (Seat in Martorell and VW in Landaben) are safe from these adjustments, for now exclusive to Germany.