Volkswagen is fighting for survival on the precipice
Conversations focus on the plan possible closure of several Volkswagen factories in Germany. This unprecedented situation could occur for the first time since the decades-long abolition earlier this month job protection. IG Metall trade union he promised fight for jobsthreatening strikeswhich could paralyze Europe’s largest car manufacturer for weeks.
A clear response from trade unions
“There will be no talks with us about closing factories and mass layoffs” – said Thorsten Gröger, the union’s chief negotiator. If VW sticks to its cutback plans, “tens of thousands of employees will force the company back on track.”
The first round of talks is taking place in Hannover, where hundreds of trade union members gathered on Wednesday. Many of them carried flags and blew whistles. For now, both sides have a long way to go reach an agreement. This is what IG Metall demands 7. percent wage increases for production workers. Union leaders said workers should not suffer because of management’s mistakes, including VW’s poor results in the US.
The biggest professional challenge of the Volkswagen CEO
The dispute is a serious challenge for CEO Oliver Blume. His their predecessors lost their battles with the unions and had to resign from their position. Blume informed the unions that labor costs in Germany are too high. In addition, car sales are falling, and Chinese manufacturers of cheap electric cars by storm are entering Europe. VW also lost momentum in the key Asian market, in China, where domestic brands began to dominate in the electric car segment.
15,000 people may lose their jobs
Blume’s main goal is to reform the unprofitable VW passenger car brand profit margins decrease as a result slowing down the transition to electric vehicles and decline consumer spending.VW could push through plant closure decisions this year, paving the way for elimination of over 15,000 jobsanalysts at Jefferies said earlier this month. The carmaker is considering the closure of not two or three plants, but the liquidation of up to five factories located in Germany, say automotive market experts.
Protests paralyze the work of the Volkswagen factory
Earlier this month Volkswagen he was already facing a wave of dissatisfaction caused employment cut plans. Then thousands of employees protested and shouted their demands to managers factory in Wolfsburgthe largest industrial plant in Europe. In response, the directors lamented decline in salesthat made it the company has two plants too many.
Supervisory board against decisions of VW management
Job cuts at VW are more difficult to push through than elsewhere. Half of the seats on the supervisory board is occupied by trade union representativesa the German state of Lower Saxony, which owns another 20 percent. sharesoften he sides with the trade unions.
