Volkswagen employees are kicking off walkouts in the group’s factories in Germany on Monday to oppose the thousands of planned job cuts, with the risk of a major social conflict in the middle of the electoral campaign.
Work stoppages are planned throughout the country, including at the headquarters of the largest European manufacturer, in Wolfsburg (north), according to the metallurgical union IG Metall which is calling for this mobilization.
This is the first step in a social movement which could take on unprecedented proportions if management and staff representatives cannot reach agreement on measures to restore the group’s competitiveness.
Symbol of the difficulties of German industry, the crisis at Volkswagen takes on a particular resonance in the middle of the campaign for the legislative elections of February 23 in Europe’s largest economy.
“If necessary, it will be the toughest collective struggle Volkswagen has ever known”warned IG Metall which said it was ready for a social conflict like Germany “hasn’t known one in decades”.
« Non viable »
Volkswagen announced in September that it was preparing a drastic savings plan, seeking to reduce costs by several billion euros at its German factories.
Three negotiation sessions between management and union took place, without result.
The gap even widened with the rejection on Friday of a union counter-proposal aimed at reducing costs without closing factories in Germany. Offer « non viable »decided the group.
Employees of German car manufacturer Volkswagen attend an information meeting organized by unions on October 28, 2024 at the company’s headquarters in Wolfsburg, northern Germany / Julian Stratenschulte / POOL/AFP/Archives
“We have to reduce our capacities”reaffirmed in November Thomas Schäfer, boss of the VW brand, the most in difficulty of the group to which Audi, Porsche, Seat and Skoda also belong.
According to IG Metall, Volkswagen plans to close three factories in Germany, which would be a first in its 87-year history. The manufacturer has ten production sites in the country and around 300,000 employees, including 120,000 for the VW brand.
The two parties will meet on December 9 in Wolfsburg for a fourth round of negotiations.
On the eve of the strike, Volkswagen said “respect the rights of employees” and believe in “constructive dialogue”under the principle of co-management, for “achieve a lasting and collectively supported solution”.
Industrial disaster
Volkswagen is suffering from a global slowdown in car sales, Chinese competition, unattractive battery models and higher labor costs than its rivals, according to experts.
Logo of the German car manufacturer Volkswagen, during the Paris motor show, October 16, 2024 / JULIEN DE ROSA / AFP
The European automotive sector is struggling as it undergoes a profound transformation to convert to electric and digital technologies.
Like Volkswagen, the entire German industry is seeing its model called into question, confronted in recent months with a litany of social plans in the automobile, chemicals and steel industries. The country’s economic activity is expected to contract in 2024, for the second year in a row.
The political paralysis since the breakup, at the beginning of November, of Olaf Scholz’s tripartite coalition, further darkens the situation. It could be several months before Germany has a new government, with negotiations between the parties likely to drag on after the vote.
German Chancellor Olaf Scholz at the G20 summit in Rio de Janeiro, Brazil, November 19, 2024 / Daniel RAMALHO / AFP/Archives
The revival of the economy has emerged as a central issue in the campaign for the February 23 elections.
The Social Democratic Chancellor (SPD) Olaf Scholz and the Minister of the Economy Robert Habeck (Greens), vying for the legislative elections, both defend subsidies to industry, in particular to reduce energy costs. Their conservative adversaries, shown to be winners by the polls, want to curb public spending.
The Lower Saxony region, where VW is headquartered, is a stronghold of the SPD.
Germany’s economic situation could worsen if Donald Trump, elected to the White House, implements tariff increases. They would lead to a reduction of around 15% in German exports to the United States, one of the main markets for vehicles Made in Germany, according to a study by the IFO institute.