Response from Berlin

Volkswagen is going through perhaps the most difficult times in its history, for many perhaps even more difficult than the period of the Dieselgate scandal of global proportions. This time it is about the financial survival of the German giant, the car industry symbol of the German economy. The news has been making the rounds of the German media for the last few hours, monopolizing the headlines, although the clouds over Volkswagen have been known for some time.

According to the workers’ council, at least three of its ten factories in Germany are to close, with the Osnabrück plant first on the list. If VW’s board plans go ahead, a barrage of tens of thousands of redundancies is expected to follow, according to the works council, as well as significant pay cuts in the coming years.

It is possible that VW’s historic plant in Wolfsburg, the symbol city of the German group, where one of the largest car manufacturing plants in the world is located, will also be affected.

A blow to the hard core of heavy industry

VW employs 120,000 workers in Germany and tough new negotiations with employers are imminent tomorrow, but they seem adamant. It speaks of a serious situation and a matter of survival of the historic automobile industry.

It is a fact that VW has been hit in recent years by China’s relentless competition, especially in the field of electrification. According to the employer’s side, labor costs in German factories are now too high, which reduces the group’s competitiveness.

The German government is concerned and calls on the employer not to proceed with mass layoffs, as emerged today from the government briefing. For months, German experts have been sounding the alarm about a deep blow to the hard core of German heavy industry and warning of unforeseen consequences.

As German radio DLF points out, citing an internal analysis of the VW group, the car market in Europe has shrunk by two million vehicles since 2020, 500,000 of which belong to VW. The latest financial figures for the company show, according to the board, the need for urgent changes.