Volkswagen begs for its future as EV crisis sees company fight for survival: 20,000 furious workers facing redundancies gather as management pleads with them to accept cuts
Furious Volkswagen workers facing redundancy have clashed with the companys management as they push for major cuts amid a drop in the sales of electric vehicles.
Furious Volkswagen workers facing redundancy have clashed with the companys management as they push for major cuts amid a drop in the sales of electric vehicles.
Around 20,000 employees gathered at Volkswagens main plant in Wolfsburg today to protest against proposed plant closures and pay cuts at the embattled German automaker.
It comes amid a slower-than-expected transition to electric vehicles with the sales of VW cars plummeting in Europe as consumers return to petrol.
Volkswagen has insisted major cuts are needed in Germany to respond to Chinese competition, something workers have described as red lines. They have threatened further strikes after a first round of walk-outs earlier this week.
The current situation is serious. New competitors are entering the market with unprecedented force. The price pressure is immense, Volkswagen Group CEO Oliver Blume said.
He said the group had to work its way back in China, its single biggest market and a stable earnings contributor until recently, adding labour costs in Germany were too high to compete.
We therefore urgently need to take measures to secure the future of Volkswagen. Our plans for this are on the table, Mr Blume added.
Workers at Volkswagen factories across Germany began strikes on Monday with those on the morning shift walking out for two hours.
Employees of German car maker Volkswagen are seen around a board reading, In silent memory, as they attend a meeting at VW headquarters in Wolfsburg
Negotiator of the IG Metall metalworkers union Thorsten Groeger chats at a company-wide meeting on Wednesday
Employees of German carmaker Volkswagen (VW) gather for a company wide meeting ainsidet the companys headquarters plant in Wolfsburg, central Germany, on December 4
German carmaker Volkswagen CEO Oliver Blume looks on at the start of a company wide meeting at the companys headquarters plant in Wolfsburg
At Volkswagens main plant in Wolfsburg, which employs 70,000 people, a two-hour strike means several hundred cars cannot be built, union sources said.
It is the first time the company has threatened to close factories in Germany in its 87-year history as European manufacturers battle foreign competition, high production costs and slow uptake of electric vehicles on the continent.
The industry has argued consumer appetite for electric vehicles is still too low.
Stellantis – which owns Vauxhall – earlier this week blamed the mandate as it announced plans to close its van factory in Luton, putting 1,100 jobs at risk. Chief Executive Carlos Tavares resigned abruptly on Sunday after the group lost around 40% of its value this year.
The boss of Fords UK arm warned late last month that Britains car industry is in crisis due to the overwhelming lack of demand for electric cars.
Lisa Brankin, the chairman and managing director of Ford UK, called for the Government to urgently introduce incentives in a bid to stoke interest.
The crisis at Europes largest carmaker has hit Germany at a time of economic uncertainty and domestic political upheaval, as well as wider turmoil among the regions automakers.
The VW strikes, which could escalate into 24-hour or unlimited stoppages unless a deal is struck in the next round of wage negotiations, will reduce Volkswagens output, adding to the impact of declining deliveries and plunging profit.
How long and how intensive this confrontation needs to be is Volkswagens responsibility at the negotiating table, Thorsten Groeger, who leads negotiations on behalf of the IG Metall union, said.
A man wearing an IG Metall (Industrial Union of Metalworkers) scarf holds a banner with the Volkswagen logo on December 2
Several thousand workers of Europes largest carmaker Volkswagen AG gather during pay-rise protests on the grounds of VWs largest plant in Wolfsburg, Germany, December 2
Employees of German car maker Volkswagen leave the exit gate before they demonstrate outside the commercial cars plant of VW in Hanover, northern Germany, on December 2
Demonstrators rally in Zwickau on Monday, the site of VWs EV-only plant
It is the first time the company has threatened to close factories in Germany in its 87-year history (Zwickau demonstration pictured on Monday)
Anyone who ignores the workforce is playing with fire - and we know how to turn sparks into flames, he added.
Daniela Cavallo, head of Volkswagens works council, reiterated that Volkswagens biggest shareholders, which apart from Lower Saxony include a holding firm controlled by the Porsche and Piech families, may also have to make sacrifices with regard to the annual dividend.
She did not elaborate what that would entail.
Cavallo said the fourth round of negotiations scheduled for December 9 would either result in both sides finding common ground or an escalation.
Unfortunately, the signals recently sent by management are not really encouraging, she said, adding plant closures, mass layoffs and cuts to existing wages were red lines for workers.
A Volkswagen spokesperson said the carmaker respected the workers right to strike and had taken steps to ensure a basic level of supplies to customers and minimise the strikes impact.
The union last week proposed measures it said would save 1.5 billion euros ($1.6 billion), including forgoing bonuses for 2025 and 2026, which management dismissed as unrealistic and delaying the inevitable.
The strikes come amid slumping sales of electric vehicles on the continent.
The first three months of the year saw a sales slump of 24 per cent in Europe as sales worldwide dropped three per cent to 136,400.
This comes in spite of efforts to revamp infrastructure and encourage consumers to buy electric alternatives, with deadlines put in place to stop the sale of petrol and diesel cars.
Rishi Sunak pushed back a deadline to block sales of new petrol and diesel cars in the UK while he was prime minister, last September.
The government had originally hoped to meet a target of preventing sales of new cars with combustion engines by 2030, but rolled this back to 2035.
Volkswagen sells some of the most popular EVs in the UK, including the Volkswagen ID.
Labour pledged to restore the 2030 phase-out target in its manifesto, but now looks set to water down targets by allowing the sale of hybrid models until 2035 amid growing pressure from car makers.
Former transport secretary Louise Haigh, who has now resigned, was reportedly open to allowing the sale of fully hybrid, Toyota Prius-style vehicles – which drives on both a normal engine as well as a battery – until 2035.
It is believed her departure will not change that view, meaning Labour will effectively adopt views first introduced by Boris Johnson in 2020.
Manufacturers have been lobbying for a change to the zero-emission vehicle (ZEV) mandate, which forces brands to sell an increasing proportion of electric cars each year.
Ms Brankin said Ford has invested significantly in the production and development of EVs, with well over £350million invested around electrification in the UK, adding: So we kind of need to make it work.
Asked whether she is happy for the Government to stick to the targets around EVs and ending production of diesel and petrol cars as long as they help persuade customers to buy electric vehicles, Ms Brankin told BBC Radio 4s Today: Yes, I think so.
She said that as an industry they supported the governments push for the uptake of EVs, but warned its just that there isnt customer demand.
An employee of German car maker Volkswagen (VW) demonstrates in front of the VW plant in Zwickau, eastern Germany, on December 2
Huge crowds turn out in protest in Wolfsburg, Germany on December 2
Volkswagen workers gather during pay-rise protests in Wolfsburg on Monday
A placard reading labour matters for all of us is held in Wolfsburg on December 2
In a speech to Volkswagen workers assembled on a square in Hanover on Monday, union representative Sascha Dudzik condemned management for making workers pay for what he said were executives mistakes, from the diesel emissions scandal to falling behind more innovative competitors in China.
We did not make these decisions - the millionaires at the top of VW did, he said.
Workers marched in Hanover, blowing whistles, holding flags and signs and accompanied by a four-piece band.
We are told we are more expensive than workers in Bratislava (Slovakia), (and) in China. Id like to know how managements salaries compare, said Stavros Christidis, works council chief at the Hanover plant.
Lucia Heim, a worker at VWs Hanover plant taking part in Mondays strike, also criticised what she saw as management injustice.
Its a twisted world: in football, trainers quit if theyre not winning the game. At VW, its the other way around. Players are being punished, she said.
Volkswagen is not alone. Despite growing steam long-term, Elon Musks Tesla saw quarterly EV sales fall from a peak of 484,500 in Q4 2023 to just 386,800 in the first quarter of 2024.
Meanwhile, Chinese car manufacturer BYD – the worlds largest seller of electric vehicles – saw global EV sales crash earlier this year.
In the first quarter of this year, it sold just over 300,000 EVs – dramatically down from 526,000 in the final quarter of last year.
Electric vehicles often cost more upfront, and sales appear to have slumped in the US and Europe in part due to reduced incentives.
Sales continue to grow in China and India.
