It is a “declaration of war of historic proportions” for the powerful IG Metall union. The threat of Volkswagen factory closures in Germany is becoming clearer, plunging the country into shock. “These brutal plans from the management board are in no way acceptable and constitute a break with everything we have experienced in the company over the past decades,” criticizes Thorsten Gröger, negotiator for the German union IG Metall, in a press release. Cause of the union’s ire: the German car manufacturer could close at least three factories, reduce the size of the other seven, and thus eliminate “tens of thousands of jobs” in Germany, according to a statement from Daniela Cavallo, the president of the group’s works council, this Monday, October 28.
The president of the group’s works council threatened the group’s management and board of directors with a breakdown in discussions, while the next meeting between management and employee representatives is being held on Wednesday, October 30 (this is also the day of the presentation of the group’s quarterly results). “If Volkswagen confirms its project on Wednesday, the board of directors will have to expect corresponding consequences from us,” insists trade unionist Thorsten Gröger. The chairman of the general works council of Volkswagen Saxony, Uwe Kunstmann, is already raising the threat of a “warm winter”, with a “move to the factory gates” in Zwickau from 1is December, reports the monthly Mercury.
The German Chancellery warns the manufacturer against a reduction in workforce. “The chancellor’s position is clear, namely that employees must not suffer the impact of any poor decisions made by management in the past and that the priority must now be to preserve jobs,” said the spokesperson. -speaker Wolfgang Büchner.
Factory costs 25 to 50% higher than expected according to management
If management and employees agree on the group’s financial difficulties, their disagreement is clear on the remedy to adopt. Daniela Cavallo calls for a “strategy for the future product range” and “ideas on how we will regain technological leadership”.
Volkswagen management insists on the need to reduce production costs in Germany. Although she did not comment directly on the October 28 announcements, she reiterated this objective. “We cannot continue as before,” declared Volkswagen CEO Thomas Schäfer, according to a statement sent to the weekly The time. “We are not productive enough at our German sites and our production costs are currently 25 to 50% higher than expected. This means that German factories cost twice as much as some of the competition.”
The group, the world’s second largest car manufacturer, intends to save a total of 4 billion euros, according to the economic daily Handelsblatt. The company still hopes to return to an operating margin rate of 6.5% by 2026. This collapsed to 3.5% at the start of 2024, half as much as in 2023.
Possible relocation of part of the car manufacturer’s activities
Management would seek, in addition to site closures, to “relocate services and entire sectors abroad or entrust them to external sources,” according to a press release from the IG Metall union. The remaining employees should also suffer a 10% salary cut, as well as renounce a monthly allowance of 167 euros currently provided for by the collective agreement, again according to IG Metall. Collective negotiations, aimed at setting the evolution of remuneration, would also be frozen for 2025 and 2026.
Suffering in particular from the full impact of the fall in Chinese demand, the manufacturer had already announced in September that it was not ruling out layoffs and would like to end its employment guarantee after 2029, in place for more than three decades. For the record, the manufacturer employs around 120,000 people across the Rhine, where it has ten factories.
Source: www.usinenouvelle.com
