AFPThe Volkswagen factory in Zwickau
NOS Nieuws•vandaag, 08:52
Volkswagen is seeing car sales decline. So far this year, Germany’s largest car manufacturer has sold 6.5 million cars. That is a decrease of 4 percent compared to the same period in 2023.
Corporate profits are also plummeting. In the third quarter of this year, profit dropped by 42 percent compared to the same quarter of 2023. In the first 9 months of 2023, Volkswagen’s operating profit was still more than 16 billion. Now it is just under 13 billion.
Factories closed
The moderate figures come at a time when there is already great unrest among employees about the possible closure of factories. Volkswagen has not yet confirmed this, but has previously announced a major reorganization. The company also says that these new figures indicate further cost savings.
Volkswagen says it is mainly struggling with high labor costs in Germany. For this reason, Volkswagen abandoned previous agreements on job guarantees for German employees. The company also does not want to meet the German union’s wage demand of 7 percent. Volkswagen would actually like employees who remain after a reorganization to forfeit wages.
Developments at Volkswagen are closely monitored by German politicians. For example, Chancellor Scholz believes that Volkswagen employees should not be victims of poor management. About 300,000 people work in German Volkswagen factories.
Volkswagen’s Tumultuous Times: Declining Sales and Troubling Developments
Well, folks, it looks like the once-mighty Volkswagen is putting the ‘fall’ in ‘Volkswagen fall-apart’. The company, famed for its iconic Beetle and—let’s be honest—a bit of a dodgy history—has just released figures that would make even the most loyal VW fan shed a tear over their faded sticker bumper. So sit back, tune in, and let’s take a cheeky ride through the latest news from Zwickau, where the plants seem more concerned about subsistence than speed!
Sales Decline: The Crunch is Real
This year, Volkswagen has only managed to crank out 6.5 million cars, marking a delightful 4% drop from the previous year’s glory. Now, 4% doesn’t sound like a lot – unless you’re at a bakery trying to buy a donut and 4% of the donuts disappear. Then it suddenly becomes a catastrophe! But wait, there’s more! Their corporate profits have taken a nosedive so steep it could give a bungee jumper vertigo. The third quarter saw profits tumble by 42% compared to the same quarter last year – so it’s safe to say the company might want to get reacquainted with their accountant and perhaps, dare I say, their financial strategy?
The Gloom in the Factory: What Does the Future Hold?
As if those numbers weren’t enough to induce a mid-life crisis among board members, the spectre of factory closures looms large like a rather ominous fog. While VW hasn’t confirmed any closures yet, employees are understandably jittery about the prospect of seeing their jobs disappear faster than a politician’s promise. With 300,000 workers hanging on the edge of their factory hats, one can’t help but wonder: Are they all getting a little too familiar with the term “corporate restructuring”? Oh, the sweet taste of irony!
Labor Costs or Labor ‘Oops’?
The company is citing high labor costs in Germany as the primary culprit for their descent into uncertainty. This is a bit rich coming from a car manufacturer that’s been in hot water for emissions scandals – talk about rolling the dice! They’ve also decided to do away with previous job guarantees, which is like saying, “Don’t worry about your future—we promise to keep the lights on… until we don’t.” And as if that wasn’t enough, they’re refusing to meet the German union’s wage demand of 7%, instead hinting that the remaining employees might have to grin and bear a little wage sacrifice. It’s like they’re staging a corporate version of “Survivor” – only, spoiler alert: you’re not guaranteed a payout!
Politicians Step In: Can Someone Save VW?
With 300,000 livelihoods at stake, German politicians are keenly watching Volkswagen’s moves like a hawk eyeing its dinner. Chancellor Scholz has spoken out, emphatically stating that the employees shouldn’t be victims of poor management. It warms the heart, doesn’t it? A politician caring for the little guy. Next, they’ll be asking for your vote in an election!
NOS Nieuws•vandaag, 08:52
Volkswagen is grappling with a notable decline in car sales this year. The iconic German automaker, which stands as the country’s largest car manufacturer, reported a total of 6.5 million vehicles sold thus far. This figure represents a worrying 4 percent decrease when compared to the same period in 2023.
In tandem with declining sales, Volkswagen’s corporate profits have also witnessed a dramatic plunge. In the third quarter alone, profits fell by a staggering 42 percent relative to the same quarter of 2023. While the company’s operating profit for the first nine months of 2023 had reached over 16 billion euros, it has now dropped to just under 13 billion euros.
The moderate figures are emerging at a time of heightened anxiety among Volkswagen employees, particularly regarding the potential closure of manufacturing plants. Although the company has yet to officially confirm any factory closures, Volkswagen has previously indicated plans for a major reorganization. These latest figures further suggest the necessity for extensive cost-reducing measures to be implemented by the company.
Volkswagen’s primary challenges stem from steep labor costs in Germany, prompting the firm to rescind earlier commitments to job security for its German workforce. In a further move to cut expenses, the automaker has refused to entertain the German union’s wage demand of 7 percent. Instead, Volkswagen is suggesting that employees who remain post-reorganization may need to accept pay reductions.
The unfolding developments at Volkswagen have caught the attention of German lawmakers, including Chancellor Scholz. He has expressed strong sentiments, asserting that Volkswagen employees should not be left vulnerable due to mismanagement. The workforce comprising about 300,000 individuals in German Volkswagen factories is now at the center of a pivotal moment for the company’s future.
