The entrance to the Volkswagen AG headquarters and factory in Wolfsburg, Germany. (Yen Duong/Bloomberg)
key takeaways:
- Volkswagen labor leaders said they are not included in the plan to cut more than 100,000 positions in Germany.
- Manager magazine reported that VW could double planned job cuts to 100,000 and close four plants in Germany.
- VW’s supervisory board is scheduled to meet on July 9 as executives push to improve competitiveness.
Labor leaders at Volkswagen AG have not been on board with a plan to cut more than 100,000 positions in Germany to boost competitiveness, highlighting governance tensions at Europe’s biggest carmaker.
The works council and IG Metall union said in an internal document published on VW’s intranet on June 29 and seen by Bloomberg News that top labor representative Daniela Cavallo has been part of VW’s new efforts to reduce costs.
Manager magazine, citing meetings among managers, reported last week that VW could double planned job cuts to 100,000 and close four plants in Germany. Major strategic decisions at VW require approval from its supervisory board, where worker representatives typically hold half the seats. Currently, they hold the majority after independent board member Suzanne Wiegand did not stand for re-election.
VW is entering another round of turmoil after CEO Oliver Blume and other executives indicated internally that the group remains uncompetitive in key areas. The company’s supervisory board meeting is scheduled to be held on July 9.
The confrontation shows how difficult it will be for Blum to push through deeper cuts at Volkswagen. Labor leaders wield significant influence; Lower Saxony often sides with workers, and the VW law gives the state a veto on major decisions while making it harder to close major German plants.
