German automotive giant\u00a0Volkswagen\u00a0is bracing for a showdown with trade unions shortly after it said it\u00a0cannot rule out\u00a0shutting factories in its home country for the first time in its nearly 90-year history.<\/p>\n
Volkswagen\u2019s management is expected to lay out its plans before about 18,000 workers at a town hall meeting in Wolfsburg on Wednesday morning, amid speculation that the carmaker could push to close sites in Osnabrueck in Lower Saxony and Dresden in Saxony.<\/p>\n
A spokesperson for Volkswagen was not immediately available to comment when contacted by CNBC on Tuesday.<\/p>\n
In a move that underlines the challenges facing Europe\u2019s top legacy carmakers, Volkswagen\u00a0warned\u00a0on Monday that it would no longer be able to rule out plant closures in Germany.<\/p>\n
The Wolfsburg-headquartered company also said it felt compelled to bring an end to its employment protection agreement \u2014 a job security program that has been in place since 1994 \u2014 in order to secure \u201curgently needed structural adjustments for greater competitiveness in the short term.\u201d<\/p>\n
Volkswagen Group CEO Oliver Blume said in a written statement on Monday that the carmaker would need to \u201cact decisively\u201d in order to future-proof the company.<\/p>\n
\u201cThe European automotive industry is in a very demanding and serious situation,\u201d Blume said.<\/p>\n
\u201cThe economic environment became even tougher, and new competitors are entering the European market. In addition, Germany in particular as a manufacturing location is falling further behind in terms of competitiveness,\u201d he added.<\/p>\n
Volkswagen said that all necessary measures would be discussed with the General Works Council \u2014 a group of elected staff members that represent the interests of a company\u2019s workforce \u2014 and with top German industrial union IG Metall. Both groups, which hold significant influence at the company, have been sharply critical of the proposals.<\/p>\n
Daniela Cavallo of Volkswagen\u2019s General Works Council said that the faction would \u201cfight bitterly\u201d against the potential plant closure measures, while a spokesperson for IG Metall described the plan as one that \u201cshakes the foundations of Volkswagen and poses a massive threat to jobs and locations.\u201d<\/p>\n
Shares of Volkswagen dipped 0.8% at around 2:15 p.m. London time on Tuesday, paring gains from the previous session. Volkswagen\u2019s stock price has fallen by more than 33% over the past five years.<\/p>\n
The downturn comes amid a difficult economic environment for the carmaker and an influx of new rivals in Europe, as Volkswagen attempts to survive the\u00a0transition to electric cars.<\/p>\n
\u201cThe situation is extremely tense and cannot be resolved through simple cost-cutting measures,\u201d VW brand CEO Thomas Sch\u00e4fer said on Monday.<\/p>\n
\u201cThis is why we want to initiate discussions with employee representatives as soon as possible to explore the possibilities for sustainably restructuring the brand,\u201d he added.<\/p>\n
Volkswagen\u2019s plans to consider unprecedented plant closures in Germany comes at a politically fraught time for Europe\u2019s largest economy. Led by Chancellor Olaf Scholz, the ruling three-way coalition in Berlin was\u00a0dealt a heavy blow\u00a0in regional votes over the weekend.<\/p>\n
\u201cThe German automotive industry stands for globally successful products and innovations. It is a central pillar for growth and prosperity in Germany,\u201d a German government spokesperson told CNBC by email, without commenting specifically on Volkswagen\u2019s planned measures.<\/p>\n
\u201cAt the same time, it is currently in a challenging phase of transformation towards electromobility. This also requires the adaptation of traditional structures and measures for greater competitiveness,\u201d the spokesperson added, according to a Google translation.<\/p>\n
\u201cA close social partnership is a hallmark of the German automotive industry. The Federal Government therefore appeals to the social partners involved to continue to fulfil this responsibility in the future.\u201d<\/p>\n
Thomas Besson, head of automotive research at Kepler Cheuvreux, said the problems at Volkswagen reflect an \u201cindustry-wide story.\u201d<\/p>\n
\u201cWe are seeing a major fragmentation story of the global automotive landscape,\u201d Besson told CNBC\u2019s \u201cStreet Signs Europe\u201d on Tuesday.<\/p>\n
\u201cThe situation \u2026 is also specific to Volkswagen, in the sense that they have put in place a number of guarantees for workers,\u201d he added.<\/p>\n
\u2014 CNBC\u2019s Annette Weisbach contributed to this report.<\/em><\/p>\n<\/p>\n German automotive giant\u00a0Volkswagen\u00a0is bracing for a showdown with trade unions shortly after it said it\u00a0cannot rule out\u00a0shutting factories in its home country for the first time in its nearly 90-year history. Volkswagen\u2019s management is expected to lay out its plans before about 18,000 workers at a town hall meeting in Wolfsburg on Wednesday morning, amid […]<\/p>\n","protected":false},"author":0,"featured_media":8974,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-8973","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/8973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=8973"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/8973\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/8974"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=8973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=8973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=8973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}