The restructuring package at Volkswagen, which includes laying off around 50,000 employees and closing some production facilities, is regarded as one of the most extensive transformation plans in the company’s history. As part of the package, which has been under discussion since July, management also plans to separate strategic departments from one another.
The German automaker is seeking savings worth billions of euros because of high labour costs, plants operating below capacity and intensifying competition from China. German trade unions oppose the plans to close plants.
One of three options will be put to a vote
Volkswagen’s Supervisory Board will vote on Friday on one of three restructuring proposals. One of the options prepared by management to reduce costs envisages the gradual and complete closure of four plants in Emden, Zwickau, Neckarsulm and Hanover between 2031 and 2034.
The plan also involves laying off tens of thousands of employees worldwide. Employee representatives and trade unions are calling for current employment levels to be maintained and for no production facilities to be closed. In their view, savings should be achieved by restructuring operational processes rather than closing plants.
If no agreement is reached, the crisis is expected to escalate and the company is expected to convene an extraordinary general meeting.
Lower Saxony proposes a compromise
The government of Lower Saxony, which holds a 20 percent strategic stake in Volkswagen, is advocating a compromise plan to bring the parties together. Under the company’s special status, the state government has the right to block decisions.
The parties’ intensive efforts to reach a compromise on September 1 failed to produce results. Although no official strike decision has been made, IG Metall is warning that production could come to a standstill if no agreement is reached.
IG Metall calls for serious dialogue
Thorsten Gröger, IG Metall’s district head in Lower Saxony and Volkswagen’s chief negotiator, said they would respond if management sought confrontation. Gröger also said the union was not seeking open conflict.
Gröger said they would not accept any measure that provided short-term relief but ultimately led to the complete closure of plants, emphasizing that IG Metall would not stand by while the future of the industrial base and production facilities was put at risk.
Gröger said information circulating within the company and media reports indicated that management was preparing extensive structural changes. He said it was wrong to assume that these decisions could be taken without the approval of Volkswagen’s Supervisory Board.
Gröger called on management to return to a rational approach and engage in serious dialogue with employee representatives instead of creating new crisis scenarios.
