Volkswagen (VW) is currently navigating turbulent waters as it faces significant employee unrest in Germany over planned plant closures and job cuts. The company’s decision to reduce capacity across all its German locations, including Lower Saxony, Hesse, and Saxony, has sparked widespread protests from employees. The works council and union representatives have warned that the situation is on the verge of escalation.
VW has terminated its longstanding job security agreement, which previously ruled out layoffs until 2029. The company is now negotiating with IG Metall, a prominent workers' union, about a 10% reduction in company tariffs and wage freezes in 2025 and 2026. The plant in Osnabrück, which recently lost a follow-up order from Porsche, is particularly at risk.
The German federal government, led by Chancellor Olaf Scholz, is demanding the preservation of jobs, cautioning that management errors should not be borne by employees. This national concern is underscored by the potential impact on thousands of workers, as VW employs around 120,000 people across its German plants.
Markenchef Thomas Schäfer has attributed the necessary cuts to high operational costs in Germany, stating that productivity levels are not competitive enough. Despite these challenges, experts believe the proposed plans may not be fully realized. The strong presence of the works council and unions in Wolfsburg, alongside the state of Lower Saxony's significant stake in VW, provide robust opposition against the company's drastic measures.
As negotiations continue, unions and the works council are urging VW to present comprehensive, sustainable strategies rather than focusing solely on cost-cutting measures. The outcome of these discussions will likely determine the future landscape of VW’s operations in Germany.
