Wave of redundancies looms

VW top management sounds the alarm: “We still have a year …”

The VW management was booed mercilessly as they entered the hall.

(Bild: APA Pool/Moritz Frankenberg)

At the works meeting in Wolfsburg, VW's top management defended their tightened austerity measures. They used alarmist words and spoke of a kind of gallows deadline. For many employees, a shaky period is now beginning, which created a tense atmosphere.

"We still have a year, maybe two years, to turn things around. But we have to use this time," said Group CFO Arno Antlitz in front of more than 10,000 employees at the VW plant. "For some time now, we have been spending more money on the brand than we are earning. That's not good in the long term!"

VW wants to use the savings to free up the funds needed for new products. "We need money now to invest heavily," said brand boss Thomas Schäfer.

VW boss: The next generation should also work for us
"If we now manage to sustainably reduce our costs and invest in a model firework display that the competition and customers have never seen before, then we will be the ones who have created the conditions for the next generations to work for Volkswagen here in Germany."

VW CEO Thomas Schäfer currently has little to laugh about.

(Bild: APA Pool/Moritz Frankenberg)

The Board of Management was greeted with fierce protests from the employees. The management was booed mercilessly. "Hands off job security," read one banner. On another, the Management Board was accused of "double standards" with regard to possible salary cuts.

VW did not provide any new details about the cost-cutting plans, which were tightened on Monday, at the event hosted by the works council. Europe's largest car manufacturer had announced that, in view of the worsening situation, it would once again tighten its austerity measures at the core VW brand.

Just under 10,000 VW employees listened to the boss's comments.

(Bild: APA Pool/Moritz Frankenberg)

Plant closures in Germany and compulsory redundancies are no longer ruled out. The works council and IG Metall trade union had announced considerable resistance, while the state of Lower Saxony, which holds a stake in VW, called on the car manufacturer to avoid plant closures.

Huge sales shortfall of 500,000 cars
With regard to the sites, Antlitz referred to overcapacities. In Europe, two million fewer cars are currently being sold each year than before the coronavirus pandemic. And this is unlikely to change. For VW, with a market share of around a quarter in Europe, this means: "We are missing the sales of around 500,000 cars, the sales for around two plants. And that has nothing to do with our products or poor sales performance. The market is simply no longer there."

VW did not provide any further information on possible locations that could close. The Group had previously stated that plant closures would only be the last resort if rapid countermeasures could not be taken. VW operates car plants in Wolfsburg, Emden, Osnabrück, Hanover, Zwickau and Dresden, as well as component factories in Kassel, Salzgitter, Braunschweig and Chemnitz.