Volkswagen faces backlash over proposed factory closures and job cuts

Arno Antlitz, Chief Financial and Operating Officer of Volkswagen told employees in a meeting on Wednesday that the company's main brand has "a year, maybe two" to cut costs and switch production to electromobility. He was met with boos and chants of "auf wiedersehen," which means goodbye.

This week, Volkswagen delivered dire news to its employees. The giant, which includes not only VW but also Audi, Seat, and Skoda, announced that it is considering closing one or two factories in Germany and terminating employment guarantees that prevent layoffs until 2029.

On Wednesday, 4 September, Volkswagen's management met with employees for the first time since presenting the situation. According to Reuters, Arno Antlitz, VW's Chief Financial and Operating Officer, faced boos in Wolfsburg. However, he appealed for joint responsibility from staff and management to reduce costs. Without this, he argued, the company would not have survived the transition to electromobility.

The agency added that in front of "a hall filled to the brim with thousands of workers" and many more watching on televisions, Antlitz said that the European car market has shrunk after the coronavirus pandemic, and the company is short of about 500,000 cars sold, equivalent to the production in two factories.

Volkswagen's management stated it needs to cut costs by £9 billion. Trade unions reacted to these statements - to put it mildly - allergically. They demand answers to questions such as why the company prefers to spend £4 billion on a partnership with the American start-up Rivian for software instead of protecting German jobs.

The potential closure of the first German factories in Volkswagen's 87-year history is also a huge problem for Olaf Scholz's ruling coalition, especially given the setbacks with populists in the eastern regions, including the far right.

According to the agency, after losing regional elections, the German Chancellor prioritised improving VW's situation. Measures such as tax incentives for purchasing electric cars are intended to aid this effort.

Germany must remain a strong car country, Labour Minister Hubertus Heil said on RTL. However, concerns about this important industry are growing due to China's increasing competition for cheaper electric cars.

The unions claim that management will not succeed in abolishing employment guarantees, cancelling raises, and closing factories. However, they note that it cannot be ruled out that one of these three goals will be achieved.