Volkswagen (VW) executives defended their proposal to potentially close factories in Germany during a tense meeting with thousands of staff on Wednesday. This decision comes as the company grapples with falling sales and the need to cut costs. The meeting, held at VW’s historic headquarters in Wolfsburg, was marked by protests from employees concerned about their future, with many waving banners and blowing whistles in a show of discontent.
Sales Decline and Factory Closures
Volkswagen’s Chief Financial Officer, Arno Antlitz, addressed the gathering of approximately 25,000 employees, explaining the severe impact of declining car sales in Europe. According to Antlitz, sales levels have not returned to their pre-pandemic figures, with the company experiencing a shortfall of around 500,000 vehicles annually. This shortfall is equivalent to the output of two factories.
“The market is simply no longer there,” Antlitz told the crowd. He stressed the importance of increasing productivity and reducing costs to ensure the company’s long-term viability. “We still have a year, maybe two years, to turn things around,” he added, without providing specific details on the proposed savings plan.
The meeting followed an internal memo that was sent to VW staff earlier in the week, informing them of the potential cost-cutting measures. In 2022, Volkswagen announced a €10 billion ($11 billion) savings program and outlined plans to reduce its workforce to improve profitability. However, recent financial results have fallen short of expectations, prompting the company to consider more drastic measures.
Unions and Workers React
The prospect of factory closures in Germany, where Volkswagen employs approximately 300,000 people across various brands, has sparked significant concern among the workforce and unions. Daniela Cavallo, chairwoman of VW’s works council, voiced her strong opposition to the proposed closures. She promised that there would be “fierce resistance” from the workforce and assured employees that no factory closures would happen under her watch.
Cavallo further criticized VW’s management, stating that the company’s struggles were not due to its German workforce or the costs associated with operating in Germany. Instead, she blamed the leadership team, asserting that “the management board is not doing its job.”
Several workers echoed Cavallo’s sentiments, expressing concern about the potential impact of the cost-cutting measures. “We’re being dismantled in secret,” said Axel Wenzlaff, a 59-year-old VW worker in Wolfsburg. He suggested that management should bear the brunt of the cuts instead of targeting the workforce.
Former VW toolmaker Michael Gadow, 66, described the potential closures as unprecedented. “It is certainly concerning for many employees who otherwise feel they work in a very safe factory,” he said. For many VW employees, a job at the company has long been considered secure, making the possibility of layoffs or factory closures particularly alarming.
International Repercussions
The threat of job cuts has already caused unrest beyond Germany. Workers at Volkswagen’s factory in Brussels went on strike on Wednesday, protesting the uncertainty surrounding the future of their plant. While strikes and protests have occurred at VW’s facilities in the past, the potential closure of factories in Germany would mark a first in the company’s 87-year history.
Economic Implications for Germany
The challenges faced by Volkswagen also pose a significant problem for the German government. The company’s difficulties in transitioning to electric vehicles and competing with foreign rivals come at a time when the domestic economy is already under pressure. Chancellor Olaf Scholz’s government is keenly aware of the importance of the automotive industry to the German economy.
“Germany must remain a car country,” said Labour Minister Hubertus Heil, following a cabinet meeting that discussed new support for electric vehicles. He urged VW’s management to find a “reasonable and socially acceptable solution” to the challenges it faces and to ensure the company remains strong.
Scholz, through his spokesperson, also indicated that the government was closely monitoring the situation. The spokesperson added that Volkswagen must collaborate with workers to find a solution that benefits all parties.
A Legacy of Resilience
For many current and former VW workers, the prospect of factory closures feels like a betrayal. Eckard Siewertsen, a retired worker who represents one of three generations of his family to have worked at Volkswagen, expressed faith that the company would recover. “Volkswagen blood still flows in my veins,” he said. Despite the current challenges, Siewertsen remained optimistic, recalling the company’s past crises and recoveries. “We have always managed to get back on our feet,” he said. “I’m working under the assumption that it will work this time, too.”
As Volkswagen faces mounting pressure from both internal and external forces, the coming months will be critical in determining the company’s future and the fate of its workers.
Discover more from Wheels Craze - Automotive News, EV News, Car News, Bike News
Subscribe to get the latest posts to your email.
