German carmaker Volkswagen (VW) plans to close production plants in Germany in all scenarios it has presented to employee representatives. VW works council chairwoman Daniela Cavallo said this at a press conference today. According to her, the carmaker has crossed several red lines. Her colleague Thorsten Gröger, who is leading negotiations for the IG Metall union, added that employees were ready to make concessions that would save the company up to 1.5 billion euros (38 billion kroner), according to Reuters.
“Big problems”
Cavallo has asked the carmaker’s management to present an alternative plan to secure the future of all the country’s factories. “We cannot solve these big problems just by looking at labour costs,” Cavallo said. Otherwise, Gröger said, workers are ready to unleash a fight “the likes of which this republic has not seen in decades.”
Employee representatives held a press conference the day before the third round of negotiations with VW management. The union is “putting on the table” savings of 1.5 billion euros, Gröger said. Specifically, they are offering that further wage increases would be transferred to a pool as working time for a limited period and would not be paid out for the time being. This, he said, would allow flexible reductions in working hours without reducing staff numbers.
Renewal of the agreement
In return, IG Metall and the works council are demanding guarantees regarding the preservation of the plants and jobs. Specifically, they want to renew the agreement that VW cancelled in September. It would cover six West German plants with 125,000 employees in Lower Saxony and Hesse, as well as three plants in East Saxony.
According to a Reuters analysis based on a memorandum from the works council, Volkswagen’s labour costs are significantly higher than those of its competitors. The share of revenue spent on labor at Volkswagen globally fell from 18.2 percent in 2020 to 15.4 percent in 2023. Competitors BMW, Mercedes-Benz or Stellantis spent 9.5 percent to 11 percent on employees in 2023. For the six West German VW plants facing closure, employee costs are between 15.8 and 17.5 percent of revenue.
Source: ÄŒTK
