Volkswagen’s proposal to slash up to 100,000 jobs and close factories faced a major test on Thursday as it was formally put to its supervisory board, with protests at the company’s plants in Germany.
Protests across 18 sites
IG Metall organised demonstrations involving shop stewards and union council members at 18 sites at Europe’s biggest carmaker, including at its headquarters. The influential staff union told the chief executive, Oliver Blume, that he could not “pass the buck for failures of recent years on to the workforce”.
Christiane Benner, the chair of the union, said the protests sent “a clear signal to the board”, which was asked to review the wide-reaching plans for the first time today at VW’s headquarters in Wolfsburg.
Thursday’s demonstrations targeted factories producing cars for Volkswagen and other brands in the manufacturing group, including Audi, Porsche and the truck and bus maker Man, between 11.20am and 2pm.
Workers demand answers
In a day of action against the reported job losses, about 70 people gathered at the factory gate at the Volkswagen plant in the north-western city of Osnabrück, which employs about 2,000 people. Workers blew whistles and held banners reading “United to fight for our future”.
The IG Metall union leader at the plant, Stephan Soldanski, said he wanted straight answers from the company about its plans, calling its employees “gutsy”. “We need a future for our site from Wolfsburg,” he told local media, referring to the VW headquarters. “But also for all the other sites. Only the board can guarantee that.”
Company defends transformation plan
A VW spokesperson said the carmaker was fighting for its long-term survival, adding: “We understand that the workforce is concerned about the future of our company. The executive board and the supervisory board share these concerns about the future of the Volkswagen Group.” He said management had “drawn up a comprehensive plan for the future, which is now being discussed by the supervisory board”.
Blume has drawn up a radical transformation plan, with the key sticking points being the possible closure of four German plants – Hanover, Emden, Zwickau and Audi’s Neckarsulm site – as well as up to 50,000 additional job cuts tied to it, sources have said.
Economic implications
With more than 650,000 staff across Germany and about 3 million employed directly and indirectly by the country’s car industry, the board meeting is being seen as a major test for the future of the German economy. In addition, the company is reviewing its sprawling structure and may carve out or spin off its core brand division and components technology business in an attempt to simplify its structure.
The presentation by Blume’s team comes after the car trade representative body, the VDA, predicted potential employment collapse across the sector in Germany and the wider continent unless “bold decisions” were taken, including the potential sell-off of unviable plants to foreign car companies.
Union resistance and legal hurdles
The carmaker employs more than 650,000 people across all its brands, which include Audi, Bentley, Skoda, Seat and Cupra, and has been hit hard by growing Chinese competition and the struggle to shift to electric cars from combustion engines. Months of talks with unions would follow if the proposals are accepted by the board, which is made up of company representatives, union representatives and local politicians, a structure set under the Volkswagen Act, a set of laws passed in the 1960s designed to protect the carmaker from hostile takeovers.
Currently, only 19 of the 20 seats on the supervisory board are occupied, leaving the board’s shareholder representatives with one fewer seat than the labour and workers’ side, which continues to hold 10 seats. Closures of plants covered by the “Volkswagen law” require a two-thirds majority, meaning approval for such a move is virtually impossible against union opposition.
Two of the company’s plants at risk – Zwickau and Neckarsulm – are not covered by the law, meaning their closure would not require supervisory board approval. However, it is likely that efforts to actively shut them down would be met with massive resistance and protests from unions and local politicians and could include costly strikes.
