Volkswagen CEO Clashes with Workers in Talks
According to CCTV News, Volkswagen CEO Oliver Blume and labor leaders clashed at a staff meeting on December 4 local time. About 20,000 workers attended the meeting, which was also attended by German Labor Minister Hubertus Heil, and the two sides will hold a fourth round of negotiations on December 9.
Volkswagen management said that in order to cope with competition, factories in Germany need to be closed and employees' wages need to be cut. But workers regard both measures as insurmountable red lines and threaten to strike further after going on strike earlier this week.
On December 2, nearly 100,000 Volkswagen employees went on strike to protest the company's cost-cutting proposals, and the strike affected nine factories in Germany. The German Metalworkers' Union (IG Metall) said the strike would take the form of two-hour strikes by morning shift workers and early departures for evening shift workers. Although the strike did not completely interrupt production, it would still cause huge economic losses to Volkswagen.
"As management, we don't live in a fantasy world, we make decisions in a rapidly changing environment," Blume told workers in Wolfsburg, warning that new competitors are entering the market with unprecedented force.
Workers booed several times during the speech by Volkswagen management, especially when Blume talked about growing up in the area and Wolfsburg being his spiritual home. Labor Minister Heil urged all parties to find a solution that does not include plant closures or forced layoffs to ensure that future investment can support Germany's industrial sector. Union officials said that if the two sides do not reach an agreement in negotiations next week, workers may increase pressure, leading to longer or even indefinite strikes.
On September 2 this year, Volkswagen issued a statement saying that in order to further cut expenses, the company is considering closing one of its car manufacturing plants and a parts plant in Germany. This will be the first time Volkswagen has closed a factory in Germany since its founding in 1926. The closure and forced layoffs of German domestic factories will be completed by 2026. On October 29, Volkswagen Group's works council informed employees on the 28th that management plans to close at least three plants in Germany, lay off tens of thousands of employees and shrink the size of all its remaining plants in Germany. The board of directors of Volkswagen in Germany has formulated a plan to save about 4 billion euros on underperforming passenger car brands. These proposals include a 10% cut in employees' monthly salaries, a suspension of wage increases in 2025 and 2026, and the closure of some German plants.
In November this year, the IG Metall union proposed a plan to Volkswagen to save 1.5 billion euros, including giving up bonuses in 2025 and 2026 and using part of the wage increase brought about by age to establish a fund to reduce working hours during periods of overcapacity. However, Volkswagen rejected the proposal, saying it could only provide short-term relief, which forced the union to take strike action.
Volkswagen is facing the challenge of declining performance. In the first three quarters of this year, Volkswagen Group's revenue increased from 235.102 billion euros in the same period last year to 237.279 billion euros; but operating profit dropped sharply from 16.241 billion euros in the same period last year to 12.907 billion euros; operating profit margin also shrank from 7.0% in the same period last year to 5.4%. Among them, the operating profit margin of Volkswagen, the core brand of Volkswagen Group, was only 2.1%.
At present, due to weak demand in the European auto market and the slower-than-expected popularity of electric vehicles, the European auto industry is in turmoil, and thousands of jobs at automakers and their suppliers are at risk. In addition to Volkswagen, many automakers and suppliers are also planning layoffs. According to incomplete statistics from the First Financial reporter, eight companies, including Volkswagen, Audi, Ford, Stellantis and four parts giants, will lay off a total of about 50,000 people in Europe.
Volkswagen management said that in order to cope with competition, factories in Germany need to be closed and employees' wages need to be cut. But workers regard both measures as insurmountable red lines and threaten to strike further after going on strike earlier this week.
On December 2, nearly 100,000 Volkswagen employees went on strike to protest the company's cost-cutting proposals, and the strike affected nine factories in Germany. The German Metalworkers' Union (IG Metall) said the strike would take the form of two-hour strikes by morning shift workers and early departures for evening shift workers. Although the strike did not completely interrupt production, it would still cause huge economic losses to Volkswagen.
"As management, we don't live in a fantasy world, we make decisions in a rapidly changing environment," Blume told workers in Wolfsburg, warning that new competitors are entering the market with unprecedented force.
Workers booed several times during the speech by Volkswagen management, especially when Blume talked about growing up in the area and Wolfsburg being his spiritual home. Labor Minister Heil urged all parties to find a solution that does not include plant closures or forced layoffs to ensure that future investment can support Germany's industrial sector. Union officials said that if the two sides do not reach an agreement in negotiations next week, workers may increase pressure, leading to longer or even indefinite strikes.
On September 2 this year, Volkswagen issued a statement saying that in order to further cut expenses, the company is considering closing one of its car manufacturing plants and a parts plant in Germany. This will be the first time Volkswagen has closed a factory in Germany since its founding in 1926. The closure and forced layoffs of German domestic factories will be completed by 2026. On October 29, Volkswagen Group's works council informed employees on the 28th that management plans to close at least three plants in Germany, lay off tens of thousands of employees and shrink the size of all its remaining plants in Germany. The board of directors of Volkswagen in Germany has formulated a plan to save about 4 billion euros on underperforming passenger car brands. These proposals include a 10% cut in employees' monthly salaries, a suspension of wage increases in 2025 and 2026, and the closure of some German plants.
In November this year, the IG Metall union proposed a plan to Volkswagen to save 1.5 billion euros, including giving up bonuses in 2025 and 2026 and using part of the wage increase brought about by age to establish a fund to reduce working hours during periods of overcapacity. However, Volkswagen rejected the proposal, saying it could only provide short-term relief, which forced the union to take strike action.
Volkswagen is facing the challenge of declining performance. In the first three quarters of this year, Volkswagen Group's revenue increased from 235.102 billion euros in the same period last year to 237.279 billion euros; but operating profit dropped sharply from 16.241 billion euros in the same period last year to 12.907 billion euros; operating profit margin also shrank from 7.0% in the same period last year to 5.4%. Among them, the operating profit margin of Volkswagen, the core brand of Volkswagen Group, was only 2.1%.
At present, due to weak demand in the European auto market and the slower-than-expected popularity of electric vehicles, the European auto industry is in turmoil, and thousands of jobs at automakers and their suppliers are at risk. In addition to Volkswagen, many automakers and suppliers are also planning layoffs. According to incomplete statistics from the First Financial reporter, eight companies, including Volkswagen, Audi, Ford, Stellantis and four parts giants, will lay off a total of about 50,000 people in Europe.
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