In a significant shift, Volkswagen is considering closing factories in Germany for the first time as it faces mounting pressure to reduce costs amid increased competition from Asian carmakers. This move signals a potential conflict between Chief Executive Oliver Blume and the powerful unions at Volkswagen.
Blume, known for his consensus-building approach, may find himself at odds with the influential IG Metall union, which has vowed to resist any closures. The company’s plans have already faced strong opposition from unions, highlighting the challenges management faces in restructuring efforts.
The works council has identified one major vehicle plant and one component factory in Germany as potentially obsolete. Volkswagen’s Chief Financial Officer Arno Antlitz and brand chief Thomas Schaefer are scheduled to discuss the matter with staff at an upcoming works council meeting.
Daniela Cavallo, head of Volkswagen’s works council, anticipates tough negotiations. “This meeting could be particularly challenging for management,” she remarked, indicating the depth of union resistance.
Analysts speculate that Volkswagen plants in Osnabrueck and Dresden might be targeted for closure. In contrast, Lower Saxony, Volkswagen’s second-largest shareholder, has expressed support for the company’s review process.
Volkswagen’s past attempts at restructuring, such as those led by former CEO Herbert Diess in 2022, were previously blocked by IG Metall. The current situation underscores the ongoing tension between the need for cost-cutting measures and the unions’ commitment to protecting jobs.
The increasing competition from Asian carmakers not only reflects the dynamic changes in the global automotive industry but also highlights the growing influence of Asia’s economic developments on European markets.
Reference(s):
Volkswagen weighs German plant closures amid cost-cutting pressures
cgtn.com
