30,000 job cuts at Volkswagen?  The Stock Exchange acknowledges “this extreme situation”, Company News

30,000 job cuts at Volkswagen? The Stock Exchange acknowledges “this extreme situation”, Company News

Volkswagen records its biggest growth in the stock market (+ 4.4%) since March when, according to the German daily newspaper Handelsblatt who cites internal discussions, the car manufacturer’s boss is considering removing 30,000 jobs at the Wolfsburg factory. The newspaper reports that the group’s management board met on September 24 (just before the parliamentary elections) and that, in this case, Herbert Diess, who was invited at the time, had mentioned. “His fears for the future of the company” and they would complain about the excessive cost “compared to the competition”, quoting Tesla. The US-based Gigafactory, based near Berlin and recently launched, has the prospect of producing 500,000 vehicles a year with the help of 120,000 employees, of which 25,000 at Volkswagen’s Wolfsburg factory leave 700,000.

The CEO would make a strong statement about the effectiveness of the Wolfsburg website, in Lower Saxony, the manufacturer’s historic headquarters. “Reforms could threaten one in four positions in the VW brand”calculation of Handelblatt. The group, which owns Audi, Porsche, Seat, Skoda and Scania, has hired about 120,000 people for its main brand.

This subject is very politically sensitive and the State of Lower Saxony, which is on the management board, as well as other members (including the Porsche / Piech family and union representatives and the working council), have a “angry” against this scheme. Herbert Driess was reportedly asked to consider alternative scenarios, which would include a reduction in fewer jobs. Later, in response to the publication of a German article, AFP published a message quoting a reporter who questioned the status quo of the conference. Agence France-Presse also reports the nuances of the union’s source, according to which the CEO revealed “Estimates on the worst case scenario”, referring to the establishment of a four-day week in 1994 which enabled “save about 30,000 jobs. […] No concrete events. »

“The debate continues”

Either way, the financial community welcomes the news. “The Diess aggression technique is key to keeping the Wolfsburg plant competitive.”, we judge within the analytical unit of the American investment bank Stifel. The transition to an electric car needs to be reduced for workers, they explain, because the construction of new cars requires fewer workers, even if batteries will be produced indoors. “The fact that the Diess contract has been extended to 2025 is encouraging,” he said. for Stifel.

Volkswagen spokesman Michael Manske, quoted by Bloomberg, confirmed Herbert Diess’s stance that Tesla’s presence in Germany had accelerated the transition to the electric car, but denied a 30,000 job reduction. “The debate is ongoing and there are already a lot of good ideas.”, said Mr. Manske. The next meeting of the Management Board, aimed at budget planning and investment for five years, will be held in one month, on 12 November. Reorganization should be mentioned there. Ahead of that date, October 28, Volkswagen will publish its third-quarter accounts which, Stifel expects, will disclose. “very bad results” for VW branding due to shortage of electronic equipment.

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