Volkswagen’s CEO Oliver Blume is facing resistance from his 20,000-strong workforce as he pushes for aggressive cost cuts in the face of strong competition from China and falling global sales. The carmaker aims to cut €10 billion in costs, including a 20% pay reduction and factory closures in Germany.
Blume addressed workers at Volkswagen’s Wolfsburg headquarters, but his pleas were met with silence. He argued that labor costs in Germany are too high for the company to compete, citing the need to sell more cars in China. However, this move has sparked opposition from workers, who interrupted him during the meeting and booed.
The carmaker has already scrapped a 30-year labor agreement that safeguarded jobs, paving the way for potential layoffs. Employees have been striking in response to ongoing negotiations between management and the works council over cost cuts. The union IG Metall reported that 100,000 workers staged walkouts on Monday.
Volkswagen’s power struggles with its powerful works council are a significant factor in the company’s ability to push through job cuts. The council, led by Daniela Cavallo, has proposed a compromise before Christmas. Blume acknowledged the proposal and expressed interest in finding a solution together.
The company’s plans for cost reduction include offering early retirement packages and voluntary redundancy options for older workers. However, it hopes to strike a deal that will see many more workers lose their jobs. The carmaker’s financial struggles are a result of strong competition from China, falling global sales, and rising production costs.
Source: https://fortune.com/europe/2024/12/05/volkswagen-ceo-oliver-blume-workers-fantasy-world