Volkswagen bosses and workers’ representatives started crunch talks Wednesday about the ailing German auto titan’s drastic cost-cutting plans, with thousands of staff staging a protest and unions vowing “bitter resistance”.
Europe’s biggest carmaker shocked employees early this month when it said it was weighing the unprecedented step of closing factories in Germany as well as deep job cuts.
The move has triggered fury from staff representatives, who accuse VW’s corporate leaders of mismanaging the 10-brand group and putting profits above building a sustainable future for the manufacturer.
The trouble at Volkswagen has come as a heavy blow to Chancellor Olaf Scholz’s government at a time the domestic economy is already struggling.
After Volkswagen’s bombshell announcement, negotiations on a new pay deal were brought forward by a month.
Ahead of the talks in Hanover, Thorsten Groeger, lead negotiator for union IG Metall, told assembled workers that it was the first time in decades that management was weighing “site closures and mass redundancies”.
He charged that VW’s management, which had already moved to axe a decades-old job protection agreement, was seeking to scare staff as they attempt to push through cuts.
“Anyone who sows fear and gambles with the future of our colleagues will reap bitter resistance,” vowed Groeger. “You don’t build the future with fear — you destroy it with fear.”
Daniela Cavallo — head of the powerful works council at VW — warned that unions still maintain a “strong influence” at Volkswagen.
“At Volkswagen, profitability and job security are corporate goals of equal rank,” she said in a speech, as some 3,000 workers rallied outside the building in Hanover, waving IG Metall flags and banners.
She conceded that VW was “currently experiencing severe problems on the economic side,” but added that employees had shown themselves “willing to compromise” in the past.
Volkswagen has been hit hard by high manufacturing costs, a stuttering switch to electric vehicles, and rising competition in key market China.
Arne Meiswinkel, who is leading negotiations for Volkswagen, said the carmaker faced a “serious situation”.
“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 Wednesday aimed at assessing “the initial situation,” he added.
The negotiations will set the terms of employment for some 120,000 workers in Germany, most of whom work at the core VW brand.
The Volkswagen Group also includes a range of other brands, from Seat and Skoda to Porsche and Audi.