Volkswagen stresses “urgency” to lower labor costs in Germany

Volkswagen management insisted on Wednesday on the urgency of restructuring the group by lowering labor costs in Germany two days after the first strikes which mobilized almost all of the main brand’s employees. “Our labor costs have become too high in Germany. This is why urgent measures are necessary to secure the future of Volkswagen.declared Oliver Blume, CEO of the leading European manufacturer during a general meeting at the group’s headquarters in Wolfsburg (center).

Volkswagen announced in September that it was preparing a restructuring plan, without ruling out German factory closures and tens of thousands of job cuts, a first in its 87-year history. After three sessions of negotiations without result between management and the IG Metall union, a first strike mobilized on Monday nearly 99,000 employees throughout the country according to the union, out of the 120,000 German employees of the VW brand, the most in difficulty .

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Severity of the situation

Oliver Blume once again mentioned the “gravity” of the situation: “New competitors are entering the market with unprecedented force. The pressure on prices is immense (…) At the same time, the European automobile market has shrunk. More supply, less demand, this forces us to act now”. “In China, our “pearl of profitability”, we must turn the corner after many years of success”he added about this crucial market where Volkswagen sales are declining. “The truth is that today we are not viable with our structures, our excess capacity and our costs”VW brand director Thomas Schäfer said in a statement.

For her part, the president of the works council threatened to amplify the social conflict. A new negotiation session is scheduled for Monday. “Either we come together and start seriously considering compromises (…) or the board of directors sticks to its positions and the situation escalates”declared Daniela Cavallo to the employees. In a European automotive sector in crisis, Volkswagen, which has around ten brands such as Audi, Skoda and Porsche, is one of the most suffering manufacturers with global sales down 2.8% over the first nine months of per year, by 10% in China.