Join day by day information updates from CleanTechnica on electronic mail. Or observe us on Google Information!
CleanTechnica readers are properly conscious that Volkswagen Group is experiencing some robust headwinds of late. Gross sales of its vehicles in China have cratered, they usually have additionally dropped sharply in different markets, particularly Germany and the US. Primarily based on quite a lot of experiences by German media, together with Der Spiegel, Automobilwoche, and Handelsblatt, Electrive says that Daniela Cavallo, head of the Works Council that represents employees at Volkswagen, has some robust calls for for the corporate earlier than any factories get shuttered.
Closing Up To Three Factories At Volkswagen
The Board of Administration allegedly needs to shut as many as three factories, downsize all its different manufacturing services, divest from some core areas, and implement huge wage cuts. The plan would additionally have an effect on electrical automotive manufacturing. “This isn’t simply saber rattling as a tactic within the present spherical of in-house wage negotiations. The Administration Board actually needs all of this and believes there is no such thing as a various,” a leaflet distributed to workers learn. The statements have been additionally made at an data occasion organized by the works council. The cuts Cavallo is referring to have been not too long ago offered to the Basic Works Council, and she or he says, “All German VW vegetation are affected by the plans.” If a plant shouldn’t be closed, there’ll in all probability be different cuts. “None are secure!” says Cavallo.
There is no such thing as a affirmation from VW about these statements. A spokesperson declined to touch upon the corporate’s alleged plans. “The corporate’s proposals and plans will first be offered internally to the negotiating companions after which mentioned,” a spokesperson mentioned. VW is “at a decisive level in its company historical past. The state of affairs is severe and the duty of the negotiating companions is gigantic,” that particular person added.
The dialogue of three factories closing comes as a shocking to many observers. In September, the Board of Administration counted German vegetation for the primary time and calculated that gross sales of 500,000 autos wouldn’t be sufficient to completely make the most of the factories. This corresponds to the manufacturing of two vegetation, mentioned VW CFO Arno Antlitz at a Works Council assembly on the time, however now yet one more is probably in play. It was assumed that smaller websites particularly, such because the Glass Manufacturing unit in Dresden and the previous Karmann plant in Osnabrück, have been on the listing for closure. (Osnabrück is at the moment with out a mannequin dedication from 2026.)
Now that three factories are being thought of for closure, that implies considered one of Volkswagen’s bigger factories might be up for dialogue. It’s not recognized which one, however it’s clear that manufacturing of the corporate’s battery-electric vehicles will likely be affected as properly. The primary manufacturing unit in Wolfsburg will in all probability not be closed, which places the Emden plant, which at the moment manufactures the ID.4 and ID.7, in jeopardy. It was scheduled to supply solely battery-electric vehicles beginning subsequent 12 months. The business automobile manufacturing unit in Hanover, which makes the ID. Buzz amongst different autos, and the MEB plant in Zwickau, the place the ID.3, ID.4, ID.5, Cupra Born, and Audi This autumn e-tron are assembled, will stay in manufacturing.
The Volkswagen Works Council warns that jobs outdoors of manufacturing are additionally in danger. The corporate administration needs to “relocate complete departments and areas overseas or outsource them,” it says. That will put semi-skilled employees and academically certified workers in danger. Even those that maintain their jobs face a potential loss in pay of “round 20 per cent.” Handelsblatt had beforehand reported that pay cuts of of 10% are probably and bonus funds within the highest pay scale group, “Tarif Plus,” are additionally more likely to be affected. Bonuses based mostly on seniority with the corporate may be on the chopping block. All these measures are mentioned to be included on a ‘poison listing’ that administration has ready. Along with the across-the-board pay cuts, zero bonuses or pay will increase are more likely to occur within the subsequent two years.
A “Week Of Fact” For Volkswagen
There may be discuss of a “week of reality” for Volkswagen. On Wednesday, the Group will current its enterprise figures for the third quarter. They’re anticipated to be modest following the revenue warning issued by the corporate a number of weeks in the past. On the identical day, negotiations with IG Metall within the subsequent spherical of collective bargaining will start. Whereas administration might be getting ready the listing of factories to be closed, the commerce unionists are demanding a 7% wage improve for workers and more cash for trainees. Handelsblatt summarizes the state of affairs: “It’s unlikely that an settlement will likely be reached shortly.” That might properly be the understatement of the 12 months to this point.
In an electronic mail to CleanTechnica, Ian Greer, a analysis professor at Cornell College Faculty of Industrial and Labor Relations who research the German auto trade, famous that Volkswagen has introduced plans to shut vegetation in Germany for the primary time within the firm’s 87-year historical past as a consequence of slumping gross sales and elevated competitors from China. Regardless of the rhetoric from Volkswagen administration, he says it’s not solely market forces which might be inflicting the corporate’s present monetary issues.
Greer says, “Lately, Volkswagen has been worthwhile. Nevertheless, the corporate paid out 22 billion euros (emphasis added) to shareholders between 2021 and 2023, above all to the Porsche and Piech households, who maintain many of the voting rights. If VW closes three vegetation, the explanation won’t solely be aggressive difficulties, but additionally the choice to pay out dividends somewhat than to spend money on the prevailing productive tissue.”
If Greer is right, it’s simple to grasp why the Works Council plans to take a troublesome line with administration with regards to job losses, pay cuts, and manufacturing unit closings. These issues are onerous to swallow when the house owners are stuffing billions into their pockets. It nearly quantities to a type of company looting that takes no account of the worth added to the corporate by its employees over time.
The employees on the Volkswagen manufacturing unit in Chattanooga, Tennessee, simply negotiated a brand new contract with the corporate that features some vital pay raises, however gross sales of Volkswagen fashions in America, each gasoline and electrical, are removed from strong. These increased wages might be simply an phantasm if Volkswagen North America can’t get its personal home so as. May a significant automotive firm like Volkswagen truly disappear from the scene? In all probability not, at the least in Europe the place it has robust model recognition, however its operations in China and North America might be curtailed considerably. It’s not instantly clear how or when the corporate will have the ability to return to profitability.
Chip in a number of {dollars} a month to assist help unbiased cleantech protection that helps to speed up the cleantech revolution!
Have a tip for CleanTechnica? Need to promote? Need to recommend a visitor for our CleanTech Discuss podcast? Contact us right here.
Join our day by day publication for 15 new cleantech tales a day. Or join our weekly one if day by day is simply too frequent.
CleanTechnica makes use of affiliate hyperlinks. See our coverage right here.
CleanTechnica’s Remark Coverage