Volkswagen is preparing a “bleeding” in Germany, according to the works council

Volkswagen plans tens of thousands of job cuts, the closure of three factories in Germany and salary cuts in the face of the crisis it is going through, the works council said on Monday, speaking of a “bleeding” unprecedented in more than 80 years of history of the leading European automobile group.

“The board wants to close at least three VW factories in Germany. It also intends to reduce the size of all remaining factories in the country”declared in a press release the president of the group’s works council, Daniela Cavallo, revealing the information transmitted to her by management.

The latter did not react immediately, only calling through a spokesperson for the social partners to hold discussions “confidential” et “an internal”.

According to an article in the business daily Handelsblatt, the group intends to save a total of 4 billion euros.

“The next meeting for salary discussions is set for Wednesday and it is a fact that Volkswagen is at a pivotal moment in its history, the situation is serious and the responsibility of the social partners is enormous”he added.

Mise en garde de Scholz

In Berlin, Chancellor Olaf Scholz, through one of his spokespersons, warned of a wave of layoffs.

The government wants to wait for VW management to decide but “the chancellor’s position is clear, namely that employees must not suffer the impact of possible bad decisions taken by (Volkswagen) management in the past and that the priority must now be to preserve jobs”dit Wolfgang Büchner.

Volkswagen’s planned plans come as the German economy is floundering with recession and rising unemployment, contributing to the government’s strong unpopularity.

The president of the manufacturer’s works council protested against the “firm intention” the Volkswagen “to bleed industrial sites dry” of the group in the country and cause a “mass unemployment” within the VW brand, which employs 120,000 people in Germany.

The plan also provides, according to her, for a 10% reduction in all salaries and their freezing in 2025 and 2026, which the daily Handelsblatt also affirmed on Monday. The press release also speaks of transfers abroad of many activities and departments of the group currently based in Germany.

The management of the automobile giant caused a shock wave at the beginning of September by announcing its restructuring project in Germany, subsequently repealing the employment guarantee agreement in force for thirty years for German employees.

Conflict in sight

For the first time in the group’s 87-year history, management had threatened to close production sites in Germany itself.

The works council, which represents employees and has co-management power over company strategy, was committed to fighting these plans. The German public authorities, via the regional state of Lower Saxony, where VW is headquartered, are also shareholders and have their say.

Staff representatives are organizing information meetings in all VW factories in Germany on Monday to inform employees of the measures taken by management, after two months of uncertainty.

The brand is suffering from the drop in demand in several regions of the world, notably in China, its main market, as well as the decline in electric vehicles whose sales have been slipping for months.

VW to begin second round of negotiations on new collective agreement on Wednesday « maison » with the industry union IG Metall. The union is demanding a 7% salary increase and better pay for apprentices, demands which remain far from the views of management.

Strikes are possible at Germany’s largest industrial employer after the mandatory social dialogue period, from December.