Volkswagen Group to close three plants due to falling demand for electric vehicles – Car Dealer Magazine

Volkswagen is set to close three factories in Europe and cut thousands of jobs as a union leader issues a stark warning to the national government: take immediate action or “German industry will go to the bottom.”

Daniela Cavallo, head of Volkswagen’s works council, sent a message to Chancellor Olaf Scholz, telling employees the automaker must lay off tens of thousands of employees and downsize its remaining factories in its home country – the first time it has closed factories on home soil. time.

“Management is taking all of this absolutely seriously. This is not saber-rattling in collective bargaining,” Cavallo said to whistling and blaring workers in VW’s hometown of Wolfsburg.

“This is the plan of Germany’s largest industrial group to start a sell-off in its home country,” she added, without specifying which plants would be affected or how many of Volkswagen Group’s more than 300,000 employees could be laid off.

Unions have threatened to break off talks with management and exercise their right to strike after December 1, as Volkswagen said in a statement it will present proposals on how to cut labor costs on Wednesday, October 30, when workers and management meet in a second round . wage negotiations, and the automaker releases third-quarter results.

VW says it faces urgent restructuring pressure due to high energy and labor costs, stiff competition from new and existing Asian brands and weakening demand in European and Chinese markets, as well as slow adoption of electric vehicles across Europe.

Cavallo also told workers that Volkswagen plans to cut salaries by at least 10% and freeze wages for the next two years.

“The situation is serious and the responsibility of the negotiating partners is enormous… Without comprehensive measures to restore competitiveness, we will not be able to afford significant investments in the future,” said Volkswagen Group board member Gunnar Kilian.

Thomas Schaefer, who heads the Volkswagen brand at VW Group, said German factories were underperforming and operating at 25% to 50% above budget.

Trade unions have great power within the company, occupying half of the seats on the supervisory board.

“If VW confirms its dystopian path on Wednesday, the board should expect corresponding consequences from us,” said IG Metall union negotiator Torsten Greger, highlighting the likelihood of strikes before the end of the year.

Germany is currently in recession, with Chancellor Olaf Scholz trailing in the polls ahead of elections next year.