Car manufacturer mega-crisis

Volkswagen faces billions in cuts

Volkswagen produced around 4.9 million vehicles at ten locations in 2023. 120,000 people are employed there.(Bild: Joerg Huettenhoelscher stock.adobe)

Germany's largest car company, Volkswagen, is struggling with severe financial problems. Crisis talks are currently being held with the management. On Monday morning, the employees are to be informed by the works council about the current state of affairs ...

And this does not bode well: VW is obviously planning to make major cuts to the workforce. According to the Handelsblatt newspaper, the Group's top management has a list in mind that is intended to bring savings of four billion euros.

All employees affected
Particularly bitter: the cuts are to affect everyone. For example, wage cuts of ten percent are planned for everyone and zero wage rounds for 2025 and 2026. Bonus payments in the highest pay scale group "Tarif Plus" and popular anniversary bonuses are also to be cut.

Head of the Works Council Daniela Cavallo(Bild: AFP/RONNY HARTMANN)

Site closures under discussion
Some scenarios are even gloomier - several VW sites could be closed. The Group refused to comment when asked. "We are not taking part in speculation about the confidential talks with the works council and the trade union," a VW spokeswoman said.

Friction with the works council
The fact that the car manufacturer is in turmoil is nothing new. VW boss Oliver Blume (56) and Volkswagen AG Works Council Chairwoman Daniela Cavallo (49) have been arguing since September about the possible abolition of job guarantees and plant closures. Cavallo is no easy opponent for the Group boss. This is because the so-called "VW law" grants employees an unusually large number of rights. This is why the works council is considered the most powerful employee representative body in our German neighbors.