Gia Automobile News Reuters reported that on September 2, Volkswagen, Europe’s largest automaker, considered closing its German factory for the first time, a move that showed that the company is facing increasing price pressure from Asian competitors.
Jetta GLI.
Photo source: Volkswagen, the move also marks the first major conflict between Volkswagen Group CEO Oliver Blume and the influential Volkswagen Union.
Analysts have said Oliver Blume is better at building consensus, unlike his predecessor Herbert Diess, who often clashed with unions.
Volkswagen believes a large German car factory and a parts factory are old and obsolete, but the company’s labor committee has vowed to “strongly resist” Volkswagen’s executive board’s plans.
Volkswagen Chief Financial Officer Arno Antlitz and Volkswagen Brand Head Thomas Schaefer will address employees at the Volkswagen Labor Council meeting on the morning of September 4.
, Daniela Cavallo, chairman of Volkswagen’s Labour Council and a member of IG Metall, Germany’s largest industry association, hopes Oliver Blume will also be involved in the negotiations, adding that the September 4 meeting “will not be easy” for Volkswagen Group management.
Previously, IG Metall has been thwarting Volkswagen’s attempts to make deeper changes, most recently in 2022, when Herbert Diess resigned as Volkswagen’s CEO.
Analysts have pointed out that Volkswagen may close its Osnabrueck plants in Lower Saxony and Dresden plants in Saxony.
The Lower Saxony state government is Volkswagen’s second-largest shareholder and backed the company’s review on September 2.
, In addition, Volkswagen, which has about 680,000 employees, said that given the current pressure, it has had to terminate the employment guarantee plan in place since 1994, which stipulates that no layoffs can be made until 2029.
At the same time, Volkswagen added that all measures will be discussed with its labor committee.
IG Metall said the employment guarantee plan covers Volkswagen plants in Wolfsburg, Hanover, Brunswick, Salzgit, Kassel and Emden.
Thomas Schaefer said in a statement: “The current situation is extremely serious and cannot be solved solely through simple cost-cutting measures.
” Volkswagen, the main force of sales in the Volkswagen Group, is the first brand to launch a cost-cutting action, aiming to save 10 billion euros (US$11 billion) in expenses by 2026 as the company tries to streamline expenses to get through the transition to electric vehicles.
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