What exactly is VW planning?
According to the works council, VW wants to close at least 3 of its 10 core brand plants in Germany. Capacity should decrease at the other locations. Redundancies are also planned for operational reasons, which have been excluded at VW since 1992. In addition, the group wants to reduce the company tariff for its approximately 120,000 employees by ten percent and is calling for zero rounds for the next two years. The company recently informed employees about these plans, and the works council has now made them public at information events at all locations.
VW itself initially did not want to confirm the information. The principle is to first discuss this internally with the employee side. The group announced “concrete proposals to reduce labor costs” for the collective bargaining round scheduled for Wednesday.
How do IG Metall and the works council react?
The union and the works council immediately announced resistance to the austerity plans. The company is “very close to escalation,” warned works council boss Daniela Cavallo. Lower Saxony’s IG Metall district manager Thorsten Gröger had previously warned that there could be warning strikes from December 1st. Then VW’s peace obligation expires, in which no strikes are allowed. “If the board wants to herald Germany’s swansong, they must expect resistance that they cannot imagine!” said Gröger.
Which locations are at risk?
Neither companies nor employee representatives have yet provided precise information on this. According to works council leader Daniela Cavallo, none of the ten locations in Germany are safe. “All German VW plants are affected by these plans. None are safe!” The plant in Osnabrück, which recently lost a hoped-for follow-up order from Porsche, is considered particularly at risk. The Transparent Factory in Dresden has also been facing an uncertain future for a long time. VW is now openly thinking about ending vehicle production in Dresden.
However, Dresden and Osnabrück are only the two smallest locations in Germany with low quantities. That is unlikely to be enough to eliminate the existing overcapacity. CFO Arno Antlitz explained in September: “We are missing sales of around 500,000 cars and sales for around two plants.” According to the works council, the company wants to solve the problem at least in part by reducing capacity everywhere.
How many jobs could be lost?
Works council boss Daniela Cavallo speaks of tens of thousands of jobs that are at stake at VW. According to a report in “Manager-Magazin” from mid-September, the ailing group could cut up to 30,000 jobs in Germany in the medium term. The company itself has not yet given a number. In total, Volkswagen AG – excluding subsidiaries such as Audi and Porsche – employs around 120,000 people in Germany.
When are terminations possible?
In September, VW terminated the employment security that had been in place since 1992, which excluded operational dismissals until 2029. The contract expires at the end of the year. Terminations for operational reasons will be possible six months later, i.e. from July 2025. The company has so far left it open as to whether and when VW will make use of this option. The company now wants to quickly negotiate new regulations with the union and the works council. The aim is to agree on a follow-up arrangement by the time the job security expires in mid-2025.
How does VW justify the measures?
Brand boss Thomas Schäfer justified the planned cuts with the high costs at the German locations. “We cannot continue as before,” he said, according to the statement. “We are not productive enough at our German locations and our factory costs are currently 25 to 50 percent higher than we had planned. This means that individual German plants are twice as expensive as the competition.” VW therefore put together an austerity package last year. However, because of the worsening situation in the automotive industry since then, this is no longer enough. The goal remains to increase the return on sales to 6.5 percent by 2026. This is the only way to finance the necessary investments in the future.
Will it all be possible to implement this?
According to experts, it is unlikely that the plans will be implemented in the same way. The works council and union have traditionally had a strong position in Wolfsburg and have announced that they will not accept factory closures or redundancies for operational reasons. Works council boss Daniela Cavallo had mentioned both of these as “red lines” several times.
In addition, the state of Lower Saxony holds 20 percent of the voting rights in VW and has a blocking minority against important decisions. On the supervisory board, employees and the two state representatives together have a majority. Prime Minister Stephan Weil (SPD) has repeatedly asked VW to avoid closing locations if possible.
What does the works council demand?
IG Metall and the works council called on the group to present an overall perspective for VW and not just individual savings measures. “We expect that instead of clear-cutting fantasies, Volkswagen and its board will outline viable future concepts at the negotiating table,” demanded IG Metall district manager Thorsten Gröger.
Works council boss Daniela Cavallo explained: “Of course we on the works council also know what the situation is currently. It is serious, in the entire industry. We have serious problems.” There is no difference when analyzing the problems. “But miles in answering the problems.” Specifically, Cavallo criticizes the fact that the company does not have a cheap electric car in its range. The entry-level models ID.2 and ID.1 planned for 2026 would come too late. In addition, there is still too much duplication of work between the corporate brands. Big savings are possible here.
What’s next?
On Wednesday, the company and IG Metall will meet in Wolfsburg for their second round of collective bargaining. In addition to the actual pay round, it will also be about the collective agreements on job security and temporary work that VW has now terminated. In November, VW will also have an important planning round in which decisions will be made about investments and plant occupancy for the next five years. Then, says Cavallo, there also needs to be clarity for the locations.
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**Interview with Daniela Cavallo, Works Council Chair at Volkswagen**
**Editor:** Thank you for joining us, Daniela. There have been significant announcements regarding potential plant closures and job reductions at Volkswagen. Can you give us a brief overview of the current situation from the perspective of the works council?
**Daniela Cavallo:** Thank you for having me. The current situation at Volkswagen is indeed concerning. We have been informed that the company plans to close at least three of its ten core plants in Germany, and all locations are at risk of capacity reductions. This is a drastic move, especially considering that discussions about redundancies have been off the table since 1992. The announcement has sent shockwaves throughout our workforce.
**Editor:** VW has indicated that redundancies and pay cuts are part of their strategy to manage costs. How does the works council view these measures?
**Daniela Cavallo:** We are firmly opposed to these austerity measures. It is unacceptable for VW to resort to closures and significant job losses as a means of addressing financial issues. We believe that Volkswagen should be looking at sustainable solutions rather than cutting jobs and reducing wages.
**Editor:** Can you elaborate on the potential impact of these job cuts? How many positions are at risk, and which locations are most affected?
**Daniela Cavallo:** Reports suggest that tens of thousands of jobs could be on the line, with estimates of up to 30,000 cuts in Germany alone. No specific plant has been spared, but we particularly recognize the risks to our smaller sites in Osnabrück and the Transparent Factory in Dresden, both of which have been struggling with low production numbers.
**Editor:** VW has defended its plans by citing higher operational costs compared to competitors. What is your stance on this justification?
**Daniela Cavallo:** While we acknowledge that there are challenges in the automotive industry, the answer cannot be to eliminate jobs. The company needs a comprehensive strategy that focuses on innovation and efficiency. Instead of looking to slash jobs, VW must prioritize creating a competitive edge by investing in its workforce and enhancing productivity at existing plants.
**Editor:** How is the works council responding to these plans? Are there any actions or strikes being considered?
**Daniela Cavallo:** We have signaled our intention to resist these proposals strongly. Precautionary measures, including potential warning strikes, have been discussed. Our union partner, IG Metall, has made it clear that we are ready to take action should these plans continue to proceed.
**Editor:** What are your immediate hopes for the upcoming negotiations with VW and IG Metall?
**Daniela Cavallo:** We expect VW to present a holistic perspective rather than piecemeal austerity measures. It’s critical that our leadership collaborates with us to design a feasible future for the company without resorting to job cuts. We are committed to defending our workforce and demand that VW prioritize stability and growth for both employees and the business.
**Editor:** Thank you, Daniela, for your insights. We hope to see a resolution that serves the interests of both the employees and the company.
**Daniela Cavallo:** Thank you for the opportunity to share our perspective.
**Interview with Daniela Cavallo, Works Council Chair at Volkswagen**
**Editor:** Thank you for joining us, Daniela. There have been significant announcements regarding potential plant closures and job reductions at Volkswagen. Can you give us a brief overview of the current situation from the perspective of the works council?
**Daniela Cavallo:** Thank you for having me. The current situation at Volkswagen is indeed concerning. We have been informed that the company plans to close at least three of its ten core plants in Germany, and all locations are at risk of capacity reductions. This is a drastic move, especially considering that discussions about redundancies have been off the table since 1992. The announcement has sent shockwaves throughout our workforce.
**Editor:** VW has indicated that redundancies and pay cuts are part of their strategy to manage costs. How does the works council view these measures?
**Daniela Cavallo:** We are firmly opposed to these austerity measures. It is unacceptable for VW to resort to closures and significant job losses as a means of addressing financial issues. We believe that Volkswagen should be looking at sustainable solutions rather than cutting jobs and reducing wages.
**Editor:** Can you elaborate on the potential impact of these job cuts? How many positions are at risk, and which locations are most affected?
**Daniela Cavallo:** Reports suggest that tens of thousands of jobs could be on the line, with estimates of up to 30,000 cuts in Germany alone. No specific plant has been spared, but we particularly recognize the risks to our smaller sites in Osnabrück and the Transparent Factory in Dresden, both of which have been struggling with low production numbers.
**Editor:** VW has defended its plans by citing higher operational costs compared to competitors. What is your stance on this justification?
**Daniela Cavallo:** While we acknowledge that there are challenges in the automotive industry, the answer cannot be to eliminate jobs. The company needs a comprehensive strategy that focuses on innovation and efficiency rather than cutting the workforce. We expect VW to outline viable future concepts and not simply rely on drastic measures.
**Editor:** What are the next steps for the works council in response to these plans?
**Daniela Cavallo:** We are ready for negotiation and we will not back down. We are calling on VW management to engage in constructive dialogue and find mutually acceptable solutions. Our aim is to prevent plant closures and protect jobs while ensuring the long-term viability of the company. We hope to present a united front during the upcoming collective bargaining round.
**Editor:** Thank you, Daniela, for sharing these insights and your commitment to protecting the workforce at Volkswagen. We will continue to follow this important story as it unfolds.
**Daniela Cavallo:** Thank you for having me, and I appreciate the coverage. It’s crucial that we keep the public informed about these developments.
