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Volkswagen’s management wants to close at least three plants, cut tens of thousands of jobs, and also slash pay by 10% for remaining staff, according to a statement from staff representatives.
The manufacturer is also seeking to downsize all remaining plants, added the document.
“This is the plan of Germany’s largest industrial group to start the sell-off in its home country,” said General Works Council Chairwoman Daniela Cavallo.
“All German VW plants are affected by this. None of them are safe!”
The announcement comes after Volkswagen recently issued its second profit warning in less than three months.
Weak demand in Chinese and European markets, along with a botched electric vehicle transition, have hit the manufacturer’s earnings.
If announced closure plans go ahead, this would be the first time Volkswagen has shut a factory on home soil in its 87-year history.
VW currently has 10 plants and 300,000 employees in Germany.
More to come…
Euronews.
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i see a lot more doing this esp the germans they were late to the electric party and china have walked all over them
It’s a tricky time for the existing manufacturers, particularly those who have built a reputation on quality engines, BMW for example, and reliability such as VW.
When it’s just a battery and an electric motor, all cars are pretty much the same. I watched an advert for BMW and it’s no longer the ‘ultimate driving machine’ it’s now ‘the soul of BMW’ the marketing team and brand people are going to have to pull something out of the bag to keep in the game.
Yup, historically China accounted for about half of VW sales, whilst the partnership was beneficial to Chinese companies. Geely, BYD etc are now under cutting VW, their market share and profits are plummeting.
Of course the EU is not liking this and instigated protectionism with levy on Chinese vehicles. Trade wars do not usually end well.
Most Chinese vehicle production is going to Russia, Western sanctions has created a boom time for the chinese vehicle industry.
I read this last week
https://unherd.com/2024/10/why-germany-is-stuck-in-the-slow-lane/
Western companies have had their own way for years, building analogue cars, but the Chinese have got a few years head start on them as far as building digital cars is concerned. They saw this coming.
If you rest on your laurels, they turn into wreaths…
Volkswagon, tried to re-invent the car when the I.D family was born. Instead of sticking to its classy interior’s of previous generations of ICE, the company instead of creating something great, created what has become equivilent of marmite across the world stage, especially the european one.
This year Volkswagon invested $700 million in Xpeng and purchase a 4.99% stake in the company. It’s partnering with Chinese EV startup Xpeng and joint venture partner SAIC to build new models and potentially co-create platforms, as it attempts to use local expertise to protect market share. Volkswagen’s partnership with Xpeng, will produce two models targeting the middle-class segment which will carry the VW logo but feature Xpeng know-how on software and autonomous driving, a win for the EV startup that is less than a decade old.
Volkswagon. has come under increasing investor pressure over its China presence, both in terms of boosting EV sales and ensuring its slate is clean on labour rights issues in the Xinjiang region where it co-owns a plant with SAIC.
Equally, europes reliance on Chinese battery cells for the european market mainstays , will only end in disaster. Unfortunately China holds some 7o% of the works REE and the recent blow to Northvolt, who are seeking a rescue pack, will only compound matters.
As mentioned above EUrope have embarked on a trade war with China, one I doub’t it will win and its allready affecting industry away from europes motor indudtry. I read this week France is up in arms, as its started to affect their Brandy industry. Certainly something to watch unfold.
Hi Kezo,
good assessment. I recall chatting to my Cathay Pacific mate about the VW factory in China. Aha he said. They just want to copy the engineering and manufacturing know-how, same as Geely with Volvo. Allegedly, bmw bought land rover to gain 4×4 expertise, then launched the X5 and sold JLR on. The British hifi industry largely made and in some cases owned, by China. The west is on a slippery slope, not helped in VAG case, by some terrible haptic switches, unlit heater sliders, poor software and unresponsive touch screens creating an ergonomic disaster. Own goals unbecoming of the brand. My Touran is built this week and being old school, avoids most of the above. Hopefully.
interesting that they have a facility in Xinjiang district. Back in the early 1990s our route to Hong Kong over Russia entered China over Xinjiang province. A very long way from any port! Home to the persecuted Uyghurs who are “encouraged” to work in the silica and silicosis plagued processing plants. Coming to the UK in a solar panel to satisfy Ed’s green agenda. To the north in Mongolia, mining and production of Neodymium for electric motors is almost as toxic. Boris’s British Volt battery factory has gone the way of his bridge to Northern Ireland. Now we cannot produce our own steel to build windmills and the grid cannot supply power for the new electric, steel recycling, furnaces at Indian owned Port Talbot, we are truly doomed. China and India have already won. Sad
This may turn Germany’s mild recession into a full recession
Apart from blinkered managment I expect this earlier deception didnt help
Volkswagen emissions scandal
Volkswagen announced plans in April 2016 to spend €16.2 billion (US$18.32 billion at April 2016 exchange rates) in relation to the scandal, and agreed in June 2016 to pay up to $14.7 billion to settle civil charges in the United States.
It’s a tricky time for the existing manufacturers, particularly those who have built a reputation on quality engines, BMW for example, and reliability such as VW. When it’s just a battery and an electric motor, all cars are pretty much the same. I watched an advert for BMW and it’s no longer the ‘ultimate driving machine’ it’s now ‘the soul of BMW’ the marketing team and brand people are going to have to pull something out of the bag to keep in the game.
Lowering their silly sky high APs for starters
Now thats a plan worth backing
Maybe if VW’s weren’t so bland & boring it would help. I don’t know who’s running their design department, but they need a good kick up the backside and sacking. So dreary.
The last VW that had any character at all was the Scirocco!
One who is making drastic change, but is it a case of Out of the frying pan, into the fire. Let’s hope not. Jaguar spare parts availability have been in disarray, marooning cars for months in some cases. Caveat Emptor. The Audi Q8 Etron EV factory in Belgium is closing, disappearing like the I Pace after just a few years in production.
https://www.autocar.co.uk/car-news/consumer/jaguar-no-longer-sells-any-new-cars-uk-f-pace-axed
As expected but imo all in vain
Thousands of Volkswagen workers in Germany went on strike on Monday after the company announced plans to close three plants and slash pensions.
“Warning strikes will begin Monday in all plants,” said Thorsten Gröger, who is leading the union negotiations with German auto giant
In October, VW reported a 64% plummet in third-quarter profits. Other German automakers, such as BMW and Mercedes-Benz, have also reported major losses.
https://www.dw.com/en/volkswagen-workers-strike-at-factories-across-germany/a-70933630
I have no issue with workers going on strike to improve their lot, but I really think the unions are misguided here. Sales of European cars are on their backside, what do they expect VAG to do? There needs to be discussion and a lot of give and take.
Volkswagen agrees deal to avoid German plant closures
Kicking the can down the road, in true socialist fashion, imho.
VAG €190 billion in debt. Productivity, especially in the factories saved from closure, already dramatically below BYD, for example. Labour cost per vehicle in Germany €7000 vs 2000 in China. Keeping the factories open whilst reducing the workforce by 35,000 of current 120,000 cannot improve those ratios. The CFO recently stated that the roof was on fire and now no extinguisher in sight.
bought my first VW, a mk 2 GTI, in 1987. Six more since plus 3 on MB and two Skodas. Sad to see their decline. The good news is Honda’s tie up with Nissan that should save the North East and talk of a Honda production line. I had a Swindon built CRV, which was an excellent car. Swindon shut because the EU removed tariffs on Japanese built cars. Just love politicians.
{Kicking the can down the road, in true socialist fashion, imho.}
The EU has a mountain of such cans and imo far too many Achilles’ heels
Without getting into politics to deeply
I feel a series of Avalanches are nigh
Motor1/Reuters reported on it a couple of days ago however, whils’t the situation looks up today, I do wonder whether it will become a hard pill for the workers to swallow having no pay rises for the forseable future. Will this cause discontent and see workers moving away from VW in the not to distant future.
At the same time VW has announced to introduce 18 new models in Chinese marke by 2030, where the maker has also seen its fair share shifts in consumer demand.
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