Volkswagen\u2019s original agreement to cut 50,000 jobs was unprecedented at the time, but now comes across as a moderate option. By Stewart Burnett<\/p>\n
Volkswagen\u2019s labor representatives reportedly warned on 24 August that the automaker\u2019s restructuring could eventually affect as many as 140,000 jobs\u2014well above the roughly 100,000 positions management has indicated thus far\u2014as the group separately works on plans to cut a further 500,000 vehicles from its annual European production capacity, according to Bloomberg. That additional reduction would bring Volkswagen\u2019s effective global capacity target down to 8.5 million units, continuing a decline from the 12 million units cut to nine million in April.<\/p>\n
Union officials\u2019 140,000 figure can be broken down into three rough layers: around 50,000 job reductions already agreed in Germany, another 50,000 positions across VW\u2019s production network, and a further 40,000 jobs tied directly to the potential closure of four German plants: Emden, Hanover, Zwickau and Audi\u2019s Neckarsulm site. The long-term futures for all four remain uncertain.<\/p>\n
The factories in question have repeatedly been the subject of closure rumours in recent months, but Chief Executive Oliver Blume has called any closure within the decade unrealistic. However, both he and management have repeatedly noted that it is difficult to determine a profitable internal use for any of them, and none are expected to find competitive capacity utilisation before 2030 regardless. External parties\u2014most notably Xpeng\u2014could potentially make a brownfield acquisition<\/a>, but this remains far from certain, and no updates from either side have been reported in several months.<\/p>\n Blume and Volkswagen brand chief Thomas Sch\u00e4fer presented the cutback plans directly to workers at the company\u2019s main Wolfsburg factory on 25 August, marking the first of a series of townhall meetings planned across Germany over the coming days. Chief Financial Officer Arno Antlitz and other senior executives are fanning out to Volkswagen\u2019s other German plants to make the same case in parallel.<\/p>\n Tensions were already running high before the meetings began. IG Metall Chief Christiane Benner lambasted Blume\u2019s push to cut costs and lift operating margins to 9% as \u201ccloud cuckoo land\u201d. Volkswagen has defended it as necessary to invest in the technologies and manufacturing processes that will secure its place in the industry\u2019s future. Unions have also criticised the \u201cdisastrous\u201d communication between management and workers, describing a widespread atmosphere of fear and uncertainty on factory floors.\u00a0<\/p>\n A local union leader warned on 24 August that the workforce is prepared to consider unprecedented strike action if Blume does not walk back his plans. Works council leader Daniela Cavallo also said in Hanover that management needs to deliver clear future job prospects for workers at every German plant, not simply demand further cuts on top of reductions to which it had previously agreed. Now the automaker appears to be framing those original figures as indicative of the scale of transformation required, rather than a binding commitment.<\/p>\n