editor
At an informational event held for employees in Wolfsburg, Daniela Cavallo, the Chairwoman of Volkswagen’s Works Council, stated, “The Board of Directors aims to shut down at least three Volkswagen plants in Germany.”
Cavallo highlighted that other Volkswagen facilities across the country would also be downsized, with the company’s board planning layoffs.
“The Board also plans to downsize all remaining factories in Germany. Specifically, this means reducing products, quantities, shifts, and entire assembly lines. Management is absolutely serious about this. This is not sabre-rattling in collective bargaining; all Volkswagen facilities in Germany are affected by these plans. None are safe,” Cavallo added.
She called for the German government to urgently prepare a master plan for German industry to prevent further industrial decline.
Cavallo did not disclose which plants might be affected by closures or how many of Volkswagen Group’s approximately 300,000 employees in Germany might face layoffs.
Emphasizing her opposition to these plans, Cavallo warned, “I can only caution every board member and everyone at the top of this company: do not mess with us, the VW workforce.”
In early September 2024, Volkswagen announced for the first time in its history that it would shut down plants in Germany as part of cost-cutting and savings measures, ending its 30-year employment protection agreement five years early.
The company cited rising energy and labor costs in Europe, diminishing competitiveness, and declining sales as reasons for these measures.
Volkswagen’s consideration to shut down German factories and end a longstanding employment protection agreement triggered a “seismic” effect within the German automotive sector, echoing its earlier decision in 2020 to cancel plans for a factory investment in Turkey.
Volkswagen has been negotiating restructuring and cost-cutting measures with unions for weeks.
German union leaders had previously warned Volkswagen against making the “historic mistake” of laying off workers, even threatening strikes.
Volkswagen Group employs approximately 650,000 people across 114 manufacturing facilities in 17 European countries, as well as 10 countries in America, Asia, and Africa, with around 300,000 employees based in Germany.
As part of its 10-billion-euro savings and cost-cutting program through 2026, the Volkswagen Group planned to reduce personnel expenses by one-fifth by that year.
Meanwhile, German automakers are grappling with inflationary pressures, high energy costs, slow economic growth in Europe, the rise of far-right political pressures, competition from Chinese carmakers, and Tesla.
German car manufacturers, with annual exports nearing 280 billion euros, face mounting pressure to reduce costs and maintain competitiveness amid weak demand from China and Europe.
The transition to electric vehicles remains challenging for Germany’s automotive sector due to various regulations within the European Union (EU) and local raw material sourcing difficulties. The sector is investing heavily in battery technology but continues to struggle with rising costs.
