Volkswagen to Consider Major Plant Closures, Cost-Cutting Measures Amid Wage Negotiations, Says Works Council

Ahead of Volkswagen’s next round of collective bargaining, Works Council Chairwoman Daniela Cavallo disclosed extensive cost-cutting proposals that reportedly include closing up to three plants, downsizing others, and implementing sweeping salary reductions across the Volkswagen Group. The proposed cuts would also impact Volkswagen’s electric car production, signaling a potential shift in the automaker’s operations.

“This is not just sabre-rattling as a tactic in the current round of in-house wage negotiations – the Management Board really wants all of this and believes there is no alternative,” read a leaflet distributed to employees, summarizing remarks made at a recent works council information session. The details were reportedly presented to the General Works Council in recent discussions, according to Cavallo. She stated that “all German VW plants are affected by the plans,” warning, “None are safe!”

Volkswagen did not confirm the works council’s statements but noted that “the company’s proposals and plans will first be presented internally to the negotiating partners and then discussed.” A company spokesperson commented on the gravity of the situation, emphasizing that VW is “at a decisive point in its corporate history,” and that “the situation is serious and the responsibility of the negotiating partners is enormous.”

Electric mobility (eMobility) production facilities could be among those affected. Volkswagen’s Chief Financial Officer Arno Antlitz previously pointed out that current sales forecasts of 500,000 vehicles may not be enough to sustain certain plants, hinting that smaller sites like Dresden’s Transparent Factory and the former Karmann plant in Osnabrück could be vulnerable to closure. According to insiders, cuts are also expected beyond production, with plans to outsource entire departments, potentially affecting workers at all levels.

With Volkswagen set to release third-quarter results on Wednesday, expectations are low following a recent profit warning. The day also marks the start of collective bargaining talks with IG Metall, where management and union representatives are anticipated to clash over pay issues. While union demands include a 7% wage hike and increased support for trainees, analysts suggest reaching a swift resolution could be challenging.

Source: Handelsblatt