- Volkswagen has canceled job guarantees in six German plants, raising the likelihood of layoffs starting next year.
- The move aims to cut costs and boost competitiveness against cheaper Asian automakers.
- Workers’ unions vow to resist layoffs, suggesting alternatives like a four-day workweek.
Wolfsburg, September 10 (FinanceFlashNews.com) – Volkswagen announced the cancellation of longstanding job guarantees at six of its German factories, a decision that could lead to layoffs as soon as next year. The automaker, Europe’s largest, is seeking to reduce costs in response to increasing competition from Asian car manufacturers, sparking tensions with workers and unions.
Cost-Cutting Measures
Volkswagen’s decision is part of broader cost-cutting efforts aimed at keeping the company competitive. Gunnar Kilian, Volkswagen’s human resources chief, explained that the company needs to cut expenses in Germany to remain viable in the evolving automotive industry. Kilian added that Volkswagen is offering to speed up wage negotiations to reduce uncertainty surrounding labor agreements.
This move follows Volkswagen’s earlier warning that, for the first time in its 87-year history, it may be forced to close domestic factories, which has raised concerns within Germany’s government and the broader automotive sector.
Union Response and Economic Context
Daniela Cavallová, head of Volkswagen’s employee council, has vowed to fight against any job cuts or plant closures, blaming management for the company’s current challenges. Meanwhile, the IG Metall labor union suggested alternatives to layoffs, including a four-day workweek. If both sides fail to reach an agreement by June 2024, labor contracts from 1994, which include additional benefits like holiday bonuses and overtime pay, will be reinstated, potentially increasing costs for the company.
Volkswagen’s struggles come during a period of economic uncertainty, exacerbated by slow growth, high energy prices, and concerns about trade relations with China, a key market for the automaker.
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Keywords: Volkswagen, layoffs, job guarantees, cost-cutting, Germany, four-day workweek, automotive industry
