Wolfsburg (Germany) (AFP) – Volkswagen workers staged protests nationwide Thursday as unions warned of a “major conflict” if the struggling German car giant pushes ahead with what could be the global auto industry’s biggest restructuring. Europe’s largest carmaker has come under intense pressure from US tariffs, slimmer profit margins from electric cars, and above all intense competition in China, the world’s largest auto market.
Thousands of job cuts have already been announced, but reports say CEO Oliver Blume is now weighing ramping these up to 100,000, as well as potentially closing four factories in Germany. As VW’s bosses presented their planned overhaul to the 10-brand group’s supervisory board, workers staged protests outside plants, and unions warned they were ready to step up industrial action. “Whoever takes on the workers is risking a major conflict,” Thorsten Groeger, an official from union IG Metall, told reporters at VW’s headquarters in the city of Wolfsburg. “We will not stand by and do nothing if the company does not change course.”
At one of the factories said to be earmarked for closure in the eastern German city of Zwickau, about 200 workers joined a demonstration, including one dressed as the grim reaper. “This site will not be closed, not against our will — we will defend it,” union official Thomas Knabel told the crowd, who waved banners that read: “United, fighting for our future”.
“If the plant were to be shut down, it would be the death blow for the region,” Denise Tschiersch, who has worked at the factory since 1997 and sits on its works council, told AFP. “This really is a dramatic situation.” VW, whose brands range from mass-market Seats to premium Porsches, has already announced plans to axe up to 50,000 jobs in Germany, including 35,000 at its namesake marque. But the outlook has since worsened considerably, VW’s bosses say, prompting them to seek far deeper cuts and factory closures.
Management are also reportedly seeking to spin off the Volkswagen brand as a separate company, which unions fear is a bid to undermine existing protections for staff. If the new plans are pushed through, it would amount to a roughly 15-percent reduction in VW’s global workforce and would eclipse all other major job-cutting drives in the auto industry. This notably includes Detroit-based General Motors’s move to cut almost 50,000 jobs in 2009 as it declared bankruptcy.
The whole German auto industry — including VW’s peers BMW and Mercedes-Benz with their suppliers — has been struggling in recent years, with job cuts and overhauls increasingly common. It could be tricky to push through such a sweeping overhaul at the 89-year-old group, however. The supervisory board currently has more worker representatives on it than shareholder representatives due to a recent departure, while VW has a complex ownership model that generally makes drastic overhauls difficult. The state of Lower Saxony — home to Wolfsburg and six VW plants — holds a substantial stake that gives it the power to block decisions.
No major announcement is expected after Thursday’s meeting, which is likely the start of a lengthy process of negotiation. While refusing to give details, a VW spokesman said previously the group needed to “improve its competitiveness” and apply “even more rigorous cost and investment discipline”. Higher US tariffs on cars and auto parts introduced last year are expected to cost VW five billion euros ($5.7 billion) annually, with the situation particularly acute at Audi and Porsche, which have no US factories. Highlighting Porsche’s struggles, the sports car maker reported Thursday that its vehicle deliveries fell 16 percent in the first half of the year.
VW is also being elbowed out of China, with years of declining sales amid stiff local competition last year leaving the firm’s vehicle deliveries in the country at their lowest level since 2011. Blume, who has warned repeatedly that the situation is critical, delivered a blunt warning to shareholders in March: “Our business model of past decades no longer works.”
© 2024 AFP
