The Volkswagen works council criticised the executive board for suggesting plant closures and threatening job security, as Volkswagen’s Chief Financial Officer says the company may not survive the transition to electric cars unless it cuts costs.
The Volkswagen works council, an organisation representing VW workers, delivered a damning speech at the Wolfsburg plant on Wednesday, with chairperson Daniela Cavallo blaming the executive board for “not doing its job,” after the company said it may need to close plants in Germany, Europe’s strongest economy.
“We don’t have a labour cost problem. We don’t have a personnel problem. We have an Executive Board that doesn’t focus on the core business enough. You cannot expect the workforce to bear the consequences of your mistakes,” Cavallo told the executive board in a room packed with thousands of workers.
Volkswagen say that the company may not survive the transition to electric cars unless it cuts costs, following a deteriorating economy and stiff competition from China.
“Your response is to close factories? Lay off people? Push for wage cuts? Such measures would only be acceptable in one scenario, and that’s if the entire business model were dead,” Cavallo added.
VW employs almost 700,000 staff, who enjoy secure working conditions that were negotiated in the 1990s.
Chief Finance Officer Arno Antlitz pleaded with workers to agree to cuts.
“Is our business model dead? If so, Dr Antlitz, where’s the ad hoc announcement for the financial markets?” Cavallo said.
Another blow for German government
VW, Europe’s biggest car maker, who is also the parent company for Audi and Skoda amongst others, is trying to save €10 billion after measures including a hiring freeze and layoffs of temporary workers that were agreed last year have proven not to be enough.
These possible plant closures are another blow for the current coalition government as the German economy is largely dependent on the car industry. With two east German states voting heavily for far-right party Alternative for Germany over the weekend, experts are now suggesting that ministries must step in.
However, this could now be an opportunity for German Chancellor Olaf Scholz, whose popularity has plummeted over the past couple of years amid squabbles with his coalition partners, to showcase his leadership and implement policies to encourage a smooth transition to electric vehicles.
