Amid a slump in sales, Germany’s most extensive carmaker plans to shut at least three factories in the country and lay off tens of thousands of staff, shrinking its remaining plants in Europe’s biggest economy as it plots a deeper-than-expected overhaul. On Monday, the company’s works council head said that management considers “at least one vehicle plant and two-component plants” in Germany dispensable, although it did not specify which locations. The powerful body, which represents workers and has half of the seats on the supervisory board, warned that Volkswagen’s plan to close plants could trigger industrial action.
The announcement came a day after VW formally terminated the waiver on compulsory redundancies in Germany, opening the door for such moves. It also comes as other German industrial giants—including BASF, Siemens, and ThyssenKrupp—warn of waning profit prospects and slumping sales. The news from VW and others has contributed to a narrative that Germany’s best days may be behind it, fueling concerns about the strength of the eurozone’s economic recovery.
The carmaker has been negotiating for weeks with unions over its plans to revamp its business and cut costs. It reportedly wants to save 10 billion euros in costs over the next few years, including closing several plants and laying off hundreds of thousands of employees.
Germany’s IG Metall, involved in the talks, slammed the plan as irresponsible and called on management to protect jobs and plants. “The board has presented an irresponsible plan that shakes the foundations of Volkswagen and massively threatens jobs and plants,” lead negotiator Thorsten Groeger said in a statement.
Groeger said it was unclear whether the company could survive if the cuts go through, adding that he believes the company’s decision to end the job protection agreement was “necessary.” The move will mean that workers who were hired before 2005 will lose their jobs if they are not able to reach a new contract by next year.
Speculation is mounting that the plant closures could include the company’s flagship factory in Wolfsburg and northern Germany at the Meyer shipyard in Emden. According to local officials, both plants are significant employers in the area known as East Frisia, and any losses would be a blow to the region’s economic growth.
Volkswagen’s chief executive, Oliver Blume, has been under pressure for weeks to make the company more competitive, arguing that it risks losing market share to cheaper competitors in China and the US. The company’s stock has lost over a third of its value in the past six months.
The workers’ struggle against these planned mass layoffs must be waged as an international campaign, with independent rank-and-file action committees being formed at the workplace. These committees must join the International Workers’ Alliance of Rank-and-File Committees to strengthen the fight against the capitalist attack on jobs and wages around the world. Only then can a natural alternative to the power of big business and its government allies be built up.
