The Board of Directors of the company claims that Volkswagen has “surplus production capacity”, when the car market has fallen significantly
AP Photo/Martin Meissner
The leadership of Volkswagen, in a meeting with the company's workers, presented its recovery plan, which includes closing a factory, removing the “guaranteed employment” status, possibly cutting jobs.
The briefing was held in front of 10,000 workers at the group's headquarters in Wolfsburg, Germany, where the board was greeted with loud boos.
Volkswagen CFO Arno Adlitz defended the company's restructuring plan, speaking of ” excess production capacity”, at a time when two million fewer cars are sold annually in Europe than before the coronavirus pandemic.
“This will hardly change,” he said, arguing that for Volkswagen, which has 25% of the European market, it means “missing sales of 500,000 cars a year, the sales of two factories.” He also said that “this has nothing to do with our products or poor sales performance, it's just that the market isn't there anymore.”
Unions: “We will resist”
The head of VW's works council, Daniela Cavallo, accused Volkswagen's board of “declaring bankruptcy” and announced “fierce resistance” to potential plant closures and layoffs. He also claimed that the administration was suffering from a “lack of ideas”: “Cutting costs, closing factories, layoffs – this response to the crisis is not just a sign of poverty, but a declaration of bankruptcy,” he said.
What he says the German government
For now the German government says it is monitoring the process from afar, pointing out that Volkswagen is a private company and cannot get involved.
Deputy government spokesman Wolfgang Bichner said that “it is initially the duty of the company to face its problems and find solutions”. Asked if the government plans to intervene to prevent factory closures, he said “the federal government is not involved at this stage”.
Olaf Scholz “of course recognizes the importance of Volkswagen as one of the largest German companies and is also aware of the transformation challenges facing the entire automotive industry,” the spokesman said, adding that the chancellor had already spoken to VW management and the works council and was “briefed in detail”, while “will continue to follow developments very closely”.
Volkswagen operates plants in Wolfsburg, Emden, Osnabruck, Salzgitter, Hanover and Braunschweig in Lower Saxony and in Zwickau, Chemnitz and Dresden in Saxony. According to reports, the plant likely to close is the one in Zwickau, which employs 10,350 workers and manufactures three electric VW models, two Audi and one Cupra, as well as the bodywork for the Bentley Bentaya and Lamborghini Urus. If a VW plant in Germany is finally closed, it will be the first in its 87-year history.
With data from the APE-MPE
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