There are many indications that Volkswagen will close its factories in Germany. This possibility was presented by the company's management at a closed meeting. According to experts, this is the result of the situation on the automotive market after the pandemic and pressure from rivals from Asia.
Volkswagen literally translates to “people's car.” It is an icon of the German automotive economy. This made its employees even more shocked when they heard that the company was considering closing its factories in Germany.
– All the employees are furious. What is happening here now is not normal. It is very sad – says one employee. – What the management is doing now is destroying the business – adds another.
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In Volkswagen's German factories, nervous talks between the company's management and trade unions have been taking place since the beginning of the week. The management is supposed to explain that the situation of the entire automotive industry is changing – new rivals are emerging and the competitiveness of the German economy is decreasing.
– We are dealing with a turning point in the entire automotive industry. The boom that the entire German industry benefited from has come to an end. We have new competition. Especially from China. Technological changes are affecting the structure of established companies such as Volkswagen – explains Stefan Bratzel, an expert at the Center of Automotive Management.
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“Serious warning sign”
Volkswagen employs about 680,000 workers. The company said it was forced to end its job security program, which prevents layoffs until 2029. – We will not allow a single workplace to close. We will fight together with the employees so that the company presents a general concept for its future – says Daniela Cavallo, chairwoman of the Volkswagen works council.
The company explains that cost cutting and the introduction of prohibitive tariffs on cheap Chinese electric cars by Brussels have not helped. The situation around Volkswagen is also a political problem. The government of Lower Saxony has a 20 percent stake in the company. The problems of the symbol of German success are bad news for the government in Berlin.
– This is a serious warning signal that the management sends to the federal government, but also to the trade unions. I believe that we need a change of mentality to survive. We have to get out of our comfort zone. There is no question of absolute job security if the company's economic result is at risk – indicates Stefan Bratzel.
There is also great anxiety at the Brussels plant of Audi, which belongs to Volkswagen. Up to 1,500 people could lose their jobs this year alone. Next year, up to 1,100 people. This is publicity the company would rather avoid.
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Dieselgate scandal
At the same time, the former head of Volkswagen, nine years after the so-called dieselgate scandal broke, appeared in court on Tuesday. Martin Winterkorn, 77, lost his position in 2015 when it turned out that millions of Volkswagen cars, thanks to special software, emitted less pollutants during tests than they actually did.
– Buyers of some vehicles were allegedly deceived into using an unauthorized device to falsify emissions test results. Professor Winterkorn allegedly failed to prevent the sale of these vehicles, despite knowing about the irregularities, says Benedikt Eicke, spokesman for the court in Braunschweig.
The accused pleads not guilty. He even faces prison. The company admitted in 2015 that it had used illegal procedures. The scandal cost Volkswagen up to 30 billion euros.
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Main image source: Reuters