The dispute over billions in savings at the German Volkswagen Group is escalating. VW reportedly wants to close three plants in Germany, leaving tens of thousands of jobs unstable. VW works council head Daniela Cavallo threatened to break off the talks in front of hundreds of employees at an information event in Wolfsburg on Monday and accused VW management of starving the locations in Germany.
“The board is against us,” Cavallo said. He not only terminated contracts, but also everything that the culture at Volkswagen stands for. “And he’s playing heavily with the risk that everything will soon escalate here. And by that I mean that we break off the discussions and do what a workforce has to do when they fear for their existence.”
Union tightens the tone
The German union IG Metall also tightened its tone. “These rabid plans by the board are in no way acceptable and a break with everything we have experienced in the company in recent decades,” said IG Metall negotiator Thorsten Gröger. The union expects that instead of VW’s clear-cutting fantasies, viable future concepts will be presented at the negotiating table. “If VW confirms its dystopian path on Wednesday, the board must expect the corresponding consequences from us.” Both sides will meet on Wednesday for the second round of ongoing collective bargaining.
The company explained that the board had shown co-determination solutions that would put the company in a financially robust position for the future and ultimately secure jobs. In view of the shrinking market, the company had to announce that it could no longer rule out plant closures without active countermeasures. Brand CEO Thomas Schäfer said costs at the German plants were a quarter to half higher than what the company had planned. “We cannot continue as before. We must quickly find a common and sustainable solution for the future of our company.” The company will make concrete proposals to reduce labor costs on Wednesday.
Political plan needed
Both sides agree that Volkswagen is currently in trouble. The company points to the shrunken European market, which is currently lacking two million cars annually – of which VW accounts for around 500,000. The return is well below the target of 6.5 percent. “We have serious problems. We have to address them at Volkswagen,” said Cavallo. Management and workers are not so far apart in analyzing the problems, but they are miles apart in finding the answer. “And these problems are also an issue for politics,” she said. “She has to finally wake up too.” It’s not enough to just say you’re on the side of the workforce. “We need a comprehensive plan from politicians on how electromobility can finally get off the ground. And I say: we also need a master plan for Germany as an industrial location.” A government spokesman said it was known the company was in a difficult situation. German Chancellor Olaf Scholz is insisting that the mistakes of the past should not be to the detriment of employees. “It must now be about securing employment.”
At the same time, the works council informed the employees in the German VW plants about the company’s plans. Accordingly, Volkswagen wants to close at least three plants in the Federal Republic, and tens of thousands of jobs are at risk. The remaining locations should be shrunk by removing products, quantities, shifts and entire assembly lines. Cavallo spoke of starvation. “None of us here can feel safe anymore.” The board is serious about its plans. “This is the plan of the largest German industrial group to start the sell-off in its home country of Germany. It is the firm intention to let the production regions bleed dry. And it is the clear intention to send tens of thousands of Volkswagen employees into mass unemployment.”
“The board does not stick to agreements”
The works council chief referred in particular to the factory in Osnabrück, from which Porsche recently took the order for the electric 718. “The board is not sticking to agreements, even those from the planning round, the value of which cannot be higher here in the group,” she criticized. Orders for the 718 Cayman and Boxster sports car models are currently being processed in Osnabrück, which go beyond the production capacities at Porsche’s main plant in Stuttgart Zuffenhausen. The models, as well as the VW vehicle T-Roc Cabrio, will expire in spring 2026 – from then on the Osnabrück factory will no longer have any orders.
The remaining employees would also have to prepare for significant salary cuts, said Cavallo. The management is demanding a permanent ten percent reduction in monthly wages, two zero rounds in 2025 and 2026 and the end of allowances and bonuses, said Cavallo. Among other things, IG Metall is demanding seven percent more wages for VW employees.
This article was updated on October 28, 2024 at 2:48 p.m.
ePaper
**Interview with Daniela Cavallo, Head of Volkswagen Works Council**
**Interviewer:** Thank you for joining us, Daniela. The situation at Volkswagen seems increasingly tense. Can you outline the main concerns for the workers regarding the potential plant closures?
**Cavallo:** Thank you for having me. Our primary concern is the threat to thousands of jobs across Germany. Volkswagen’s plans to close three plants are not just about numbers; they represent the very livelihoods of our members and their families. We feel that the management is neglecting the social fabric that has supported this company for decades.
**Interviewer:** You mentioned that the board is “starving” the plants. What do you mean by that?
**Cavallo:** By “starving,” I mean that the management is making decisions that undermine our operations and worker morale. They’re cutting contracts and failing to invest in our facilities, which jeopardizes everything we’ve built together at Volkswagen. If we don’t get active countermeasures, we’re looking at a serious escalation in this conflict.
**Interviewer:** The German union IG Metall has also intensified its rhetoric. What support are you receiving from them?
**Cavallo:** IG Metall stands firm with us. They share our belief that VW’s current plans are a radical departure from the company’s long-standing values. We expect robust negotiations, and IG Metall is prepared to take action if the board doesn’t pivot towards sustainable, equitable solutions that prioritize workers’ rights and job security.
**Interviewer:** Volkswagen’s management has pointed to a shrinking market and rising costs as reasons for potential closures. How do you respond to that?
**Cavallo:** While we recognize that the market is challenging, merely suggesting plant closures is not the right answer. Communication between management and workers is vital, and we all agree on the issues at hand. However, we are miles apart on the solutions. We are calling for a comprehensive plan that not only addresses the financial aspects but also ensures that we have a future in Germany as an industrial location.
**Interviewer:** There’s mention of significant wage cuts proposed by management. How do you foresee that affecting worker morale?
**Cavallo:** Permanent wage cuts and the elimination of bonuses would devastate worker morale. Our members are already worried about their job security; these proposals would only deepen that fear and frustration. If we want committed and motivated workers, they need to feel secure and valued. We are fighting for a reasonable wage increase, not cuts that would hurt our standard of living.
**Interviewer:** What’s your outlook for the upcoming negotiations? Are you hopeful for a positive resolution?
**Cavallo:** I have a cautious hope. We must approach the next negotiation round ready to stand firm on our principles and the future of our workforce. We owe it to our employees to defend their rights and work diligently toward solutions that benefit all involved. If the board is willing to listen and negotiate in good faith, there is hope. However, we will not shy away from taking necessary actions if they continue down their current path.
**Interviewer:** Thank you for sharing your insights, Daniela. We wish you and your colleagues the best in the negotiations ahead.
**Cavallo:** Thank you very much. Let’s hope for a productive outcome that keeps our factories and our workforce strong.
A lot of concern about wages as well. You’ve indicated that management is asking for significant salary cuts. Can you elaborate on that issue?
**Cavallo:** Yes, the proposed cuts are alarming. Management is demanding a permanent ten percent reduction in wages, along with zero raises for the next two years and the elimination of bonuses and allowances. This is not just unfair; it threatens the financial stability of many of our workers. At the same time, IG Metall is actively pushing for a seven percent wage increase. We need to ensure our workforce is compensated fairly, especially in these uncertain times. It’s about valuing the hard work and dedication of our employees.
**Interviewer:** Looking ahead, what are your expectations for the negotiations that will take place on Wednesday?
**Cavallo:** My primary hope is that the board will come to the table with viable alternatives that prioritize job security and our shared interests. The rhetoric needs to change; we need concrete proposals that reflect a commitment to our workforce and the values Volkswagen has historically embraced. If we fail to reach a satisfactory agreement, we will have no choice but to escalate our actions, with the workforce standing united against these unjust plans.
**Interviewer:** Lastly, what message would you like to give to Volkswagen employees and the wider public regarding this situation?
**Cavallo:** To our fellow employees, I want to stress that we are fighting for all of us. This isn’t just about current jobs; it’s about our future and the legacy of Volkswagen as an iconic employer in Germany. To the public and politicians, I urge you to support us in demanding a strategic plan for the transition to electromobility that secures jobs and fosters innovation in our industry. Together, we can reshape the future of Volkswagen while ensuring we protect the workers who made it what it is today.
**Interviewer:** Thank you, Daniela, for sharing your insights with us. We look forward to seeing how this situation develops.
**Cavallo:** Thank you for the opportunity to speak. It’s crucial that we keep these conversations ongoing.
