Volkswagen: Works Council and trade union present restructuring plan

Just under a year ago, the Volkswagen brand, VW Passenger Cars, imposed a tough austerity program. The core objective is to significantly increase the margin per car, as VW Passenger Cars is lagging behind many of its competitors in this respect. At the end of August 2024, it became known that the targets set could not be achieved with the previous plans. The Group's management has therefore announced severe cuts. The IG Metall trade union and the Volkswagen Works Council have now submitted their own proposal on how the core brand VW Passenger Cars can be led into a better economic future.

Wage cuts offered

To this end, both have put the reduction of labor costs by 1.5  billion euros on the table in the current round of collective bargaining. The employee representatives are proposing not to pay out the upcoming wage increase for the time being, but to pay it into a future fund as working time for a limited period. They argue that this would allow flexible reductions in working hours without reducing staff numbers. The most recent wage agreement for the metal and electrical industry should serve as a model. It provides for a total increase of 5.1 percent in two stages by 2026.

Guarantees for sites and employment required

For their part, they are demanding that Group management keep the employment guarantee, which Volkswagen terminated in September, in force. Group management must also refrain from closing the six plants in Hesse and Lower Saxony and the three in Saxony. The works council and trade union are therefore calling for a comprehensive guarantee for locations and jobs. "If the Board of Management insists on maximum positions and plant closures, it will take responsibility for the fact that we will end up in a labor dispute over locations the likes of which the country has never seen before," threatened IG Metall District Manager Thorsten Gröger. The peace obligation in the current collective bargaining round ends on November 30.

There is still no reaction from Volkswagen's top management. It had not only brought plant closures into play, but also demanded a flat-rate wage reduction of 10 percent in the current round of collective bargaining. Group CEO Oliver Blume had emphasized that the situation at VW Passenger Cars was extremely serious. However, the Group as a whole is not in a bad position. Last year it earned just under 18  billion euros.

(mfz)