by Admin
Sep 7, 2024
A face off between Volkswagen workers and managements held on Wednesday after the company announced plans of a possible shutdown of the company plants in Germany.
This was a major consideration that was initially put aside by the management but later reversed after a major brankruptcy hit the company. The plants expected to be shutdown are Volkswagen site in Osnabrueck in Lower Saxony and Dresden in Saxony.
Volkswagen management earlier in the week had said it felt that its employment protection agreement, which has been in place since 1994 and protects the workforce in Germany until 2029, may need to end.
In a statement by CEO of Volkswagen Group, Oliver Blume, he stated that the current predicament of the company has affected all members of the company emotionally which didn’t exclude him also.
He further said that “
“Together, we will implement appropriate measures to become more profitable. We are leading VW back to where the brand belongs — that is the responsibility of all of us,” he highlighted the company’s decision to the change of the automobile industry in recent years.
The automotive industry which has experienced significant changes over the last few years has moved from the fuel driven cars to the electric vehicles and also the different governments policies that have called for environmental protection and regulation which requires the less use of fumes from vehicles.
Arno Antlitz, chief financial officer and chief operating officer of Volkswagen Group, who was also present at the meeting explained to the aggrieved employees that the decline in annual vehicle sales in Europe have drastically reduced in demand which can’t be compared to the pre COVID-19 era.
He further pointed out that “We have been spending more money at the brand than we earn for some time now. That doesn’t go well in the long term,” he explained that the estimates for Volkswagen holds around a quarter of the European market share, which means that the drastic reduction in sales is equivalent to a total reduction of 500,000 yearly sales in the company’s vehicles market cap, which also equals to a combined sales which is typically achieved by two of the company’s plants.
Antlitz explained further that “It is our joint responsibility to improve the cost efficiency of the German sites in particular. We need to increase productivity and reduce costs, We still have a year, maybe two years, to turn things around. But we have to make use of this time.”
A leading representative of Volkswagen’s General Works Council, Daniela Cavallo, said “is not just a disgrace. It’s a declaration of bankruptcy.” She added that “”And what can you come up with? Closing factories? Terminations for operational reasons? Cutting wages? Such ideas would only be admissible in one scenario! And that is if the entire business model is dead.”
She finally called on the Volkswagen mangements to look for another way which would not require shutting down the plants