Germany’s political top announces that it will try to block the plan of the car manufacturer Volkswagen on the elimination of 100,000 jobs and the closure of four factories in Germany. As it says Politicsthis begins a clash between the company’s management and the politicians and unions who sit on the supervisory board and have enough votes to stop or significantly change the plan.
“The primary goal is to preserve the production sites of German manufacturers and protect jobs,” said a spokesman for the chancellor Friedrich Merz Stefan Kornelius.
The state of Lower Saxony, where Volkswagen is headquartered and is the company’s second largest shareholder, has a particular influence. President of the regional government Olaf Lies from among the social democrats, who sits on the supervisory board, emphasized that the solution cannot simply be to lay off employees or close factories. According to him, management must prepare a plan that will allow Volkswagen to regain market share, technological leadership and greater competitiveness.
According to the magazine Manager Magazineto which it refers Politicsthe supervisory board will decide on the plan on July 9. Employee representatives and regional politicians have 11 votes in the 19-member body, so it is unlikely that the proposal will be approved without significant changes or additional guarantees for employees.
One of the most controversial parts of the plan is the potential spin-off of the Volkswagen division into a separate company. PHOTO: Matthias Rietschel/Reuters
Volkswagen’s plan to lay off nearly one in six workers and close four factories in Germany is the starkest indication yet of the growing distress of Germany’s manufacturing sector and its once-glorious auto industry. Both are under increasing pressure from competition from China and the tariff war led by the US president Donald Trump.
Politics points out that one of the most controversial parts of the plan may be the possible spin-off of the Volkswagen division into a separate company. According to reports Reuters the management is considering the elimination of the basic Volkswagen car brand (VW Passenger Cars) and the division for the production of car components (Volkswagen Components). Analysts estimate that this would ensure greater freedom in restructuring, as it would reduce the influence of the state and unions on key business decisions.
According to analysts, this would give management more freedom to make decisions about factory closings and layoffs, as it would reduce the influence of the state and unions. Professor of automotive economics Helena Wisbert he estimates that it would be a very radical move, but at the same time it would show how much pressure there is to reduce costs in the company.
Volkswagen declined to comment on the allegations. They only said that the entire group needed a “fundamental transformation” and that management had been preparing a strategic plan to restructure the company for several months.
