Industry VW sticks to plans for factory closures in Germany

Despite fierce protests by employees, Volkswagen is sticking to its plans for factory closures and redundancies in Germany. "We have to reduce our capacities and adapt to the new realities," said the head of the VW brand, Thomas Schäfer.

When asked whether VW could do without plant closures, Schäfer told "Welt am Sonntag": "We don't see that happening at the moment." On Thursday, thousands of VW employees demonstrated in Wolfsburg against mass redundancies and plant closures.

The General Works Council and IG Metall presented a so-called future concept for the third round of collective bargaining, in which they propose a salary waiver by the workforce and the Board of Management in return for guarantees for employment and sites.

Schäfer said that the majority of the "necessary" job cuts would be "possible via the demographic curve". However, this would not be enough because it would "simply take too long". The restructuring should be implemented in a "period of three or four years".

The head of the VW brand said that the company had "made every effort to find other ideas". Many of these, such as product improvements, lower logistics and material costs, are already part of the current savings program. However, four billion euros were still missing from the savings target "so that the company can generate enough money to continue investing from its own resources".

Unfortunately, nothing significant has yet happened in terms of labor costs. Competitors have a labor cost share of around ten percent of sales revenue, at VW it is "significantly more".

Schäfer agreed with the IG Metall trade union's demand for management salary cuts. Since January, the fixed salary of the Board of Management has been reduced by five percent and the management has also waived an inflation adjustment of 1000 euros and a 3.5 percent salary increase.

Lower Saxony's Minister President Stephan Weil (SPD) told the "Süddeutsche Zeitung" that he also sees the shareholders as having a duty: "The dividend is not the top priority for the state of Lower Saxony." Above all, the state of Lower Saxony has a strong interest in VW doing well. Lower Saxony owns a 20 percent stake in VW. More than half of the shares are owned by the Porsche and Piëch families. Qatar also has shares.

SDA