Volkswagen executives and labor representatives commenced intense discussions on Wednesday regarding the struggling German automotive giant's radical cost-cutting measures, as thousands of employees staged a protest and unions pledged 'bitter resistance.' Europe's largest car manufacturer stunned its workforce earlier this month by considering the unprecedented move of closing factories in Germany and implementing significant job cuts. This decision has ignited outrage among staff representatives, who accuse VW's leadership of mismanaging the 10-brand group and prioritizing profits over building a sustainable future for the company.
The crisis at Volkswagen has dealt a severe blow to Chancellor Olaf Scholz's government, which is already grappling with a struggling domestic economy. Following Volkswagen's shocking announcement, negotiations for a new pay deal were expedited by a month. Ahead of the talks in Hanover, Thorsten Groeger, the lead negotiator for union IG Metall, addressed assembled workers, stating that it was the first time in decades that management was contemplating 'site closures and mass redundancies.' He accused VW's management of attempting to intimidate staff as they push for cuts, having already scrapped a long-standing job protection agreement.
'Anyone who sows fear and gambles with the future of our colleagues will face bitter resistance,' Groeger vowed. 'You don't build the future with fear—you destroy it with fear.' Daniela Cavallo, head of VW's powerful works council, warned that unions still wield 'strong influence' at Volkswagen. 'At Volkswagen, profitability and job security are corporate goals of equal rank,' she said in a speech, as around 3,000 workers rallied outside the Hanover building, waving IG Metall flags and banners. Cavallo acknowledged that VW was 'currently experiencing severe economic problems,' but noted that employees had shown a willingness to compromise in the past.
Volkswagen has been severely impacted by high production costs, a sluggish transition to electric vehicles, and increasing competition in its key market, China. Arne Meiswinkel, who is leading negotiations for Volkswagen, described the carmaker's situation as 'serious.' 'We are at risk of being overtaken by international competition,' he said. 'We therefore have to take action. To remain competitive, we have to comprehensively restructure Volkswagen together now.' The first round of talks on Wednesday aimed to assess 'the initial situation.' These negotiations will determine the employment terms for approximately 120,000 workers in Germany, most of whom are employed by the core VW brand. The Volkswagen Group also encompasses a range of other brands, from Seat and Skoda to Porsche and Audi.
