German carmaker warns of stagnation in the European sector amid news of deeper-than-expected action
The German carmaker Volkswagen is planning to shut at least three factories in its home country, lay off thousands of workers and cut pay by 10%, according to the company’s union.
The deeper-than-expected cuts come as the company faces weak sales and slow expansion in the electric vehicle (EV) sector amid tough competition from Chinese manufacturers.
“The board wants to close at least three factories in Germany,” the works council chief, Daniela Cavallo, told employees at VW’s headquarters in Wolfsburg on Monday. Its remaining manufacturing sites will reduce capacity, she said, citing information provided by management.
As Europe’s top economy suffers a crisis in manufacturing and fears of mass unemployment, VW is aiming for a fundamental restructuring to cut costs. It had initially warned last month that it had the equivalent of two factories of extra capacity in Germany.
Some context from someone who lives in germany:
VW has for quite a while now failed to read the writing on the wall and join in on the growing market for electronic cars. All the while getting subsidies from the german government.
Now they cant compete anymore and even their regular cars are way to expensive for a lot of germans to buy. And the chinese manufacturers are pushing them even further out of a market they failed to enter by refusing to innovate years ago.
A lot of this reads over here like hostage taking: They want more subsidies for their failing company model, or they leave the country.
Failing to read the market… or shareholders wanting dividends rather than invest it in the companies future?
Alternatively, the German government nationalizes VW to keep the jobs, fires upper management and replace them with people that get the orders to make cheap/affordable EVs for the masses.
Fuck the shareholders.
Too late the state of Lower Saxony and the work’s council together already have majority voting rights. By pure shares the Porsche/Piëch clan has a majority but the work’s council gets 50% - 1 seats on the board (generally the case for big German companies) so they can’t just dictate things.
That said the work’s council previously did agree to a severe downsizing, back when automation swept the industry they agreed to introduce it, opposing it would’ve meant the end of the company, but made sure that the most back-breaking jobs got automated first, and that staff reduction was done with early retirement and a stop to hiring, not massive layoffs. Something like this may happen again but the way that the executive council is acting right now – yeah I think their heads are going to roll. They’re acting as if the company wasn’t, ultimately, run by IG Metall (via works council and socdem state government).
Reminds me of what we go through with the big 3 in the us
Exactly what I was thinking.
I remember how GM did fuckall in the 90s while Honda and Toyota and even Hyundai ate their lunch.
Their plant in Chattanooga TN started making EV’s in 2022. My dad retired from VW and keeps tabs. In his opinion they still aren’t selling well.
They’re all mega expensive, arent’ they?
I feel like a huge mistake is making heavy, mega luxury EVs instead of pushing smaller-battery cars with a tiny (I’m talking like 2hp) backup generator.
$40,000 for ID4. I don’t know if that currently qualifies for the government rebates.
The problem is the Chinese market, which has been a huge market for VW. That’s where they failed to come up with a viable competitor to the cheap EVs that are selling like hotcakes in China. Yes, the U.S. sales have been lackluster but that’s not what is driving VW’s woes. The U.S. is a relatively small market for VW.
I remember reading somewhere that they have a subsidiary that was made to implement the software needed to run EVs, and another something to do with batteries. Both of these subsidiaries have appeared to be massive failures, though the reasons weren’t stated in the article I read. Were they just badly funded? Or were the people hired there resistant to switching to EVs?
I wonder where I’ve heard that before but I have NO fucKIng ideA. (I’m just being cryptic for fun)
Also, well, they illegally lied to us. Now being surprised (Pikachu face) I bought a Chinese car, I can have that for cheap.