Volkswagen Faces Cost-Cutting Turmoil

Volkswagen is facing significant financial challenges, prompting the company to consider drastic cost-cutting measures, primarily focusing on reducing employee wages. The automaker plans to cut salaries by 10%, eliminate bonuses, and implement a wage freeze to save 4 billion euros, aiming to achieve annual savings of 2 billion euros.

Proposed plant closures and job eliminations could affect tens of thousands of workers, sparking resistance from the works council and trade unions. Lower Saxony's Prime Minister, Stephan Weil, a VW Supervisory Board member, opposes these measures, advocating for alternatives to protect jobs and the automotive industry.

Weil suggests incentives for electric vehicle purchases and a relaxation of EU emission limits as potential solutions. Amid ongoing negotiations, the union IG Metall is demanding a 7% wage increase, threatening strikes if their demands are not met.

Tension continues as both VW management and labor representatives seek a compromise to navigate the looming crisis without resorting to drastic job cuts and site closures.