AutoBeta(AutoBeta.net)10/30 Report--

Daniella Cavallo, chairman of the labor committee of the German Volkswagen Group, revealed on Oct. 28 local time that the group plans to close at least three factories in Germany and cut tens of thousands of jobs. According to Mr Cavallo, the group's management has made it clear that layoffs must be taken in Germany to maintain operations, and all Volkswagen factories in Germany are expected to be affected by the plan.

According to reports, thousands of people gathered in front of Volkswagen's headquarters in Wolfsburg, Germany, on Oct. 28 local time, and workers demanded that the company should not close any of its factories. However, Cavallo, chairman of the labor committee of Volkswagen Group, still said that in addition to layoffs and factory closures, Volkswagen also plans to cut employees' salaries by at least 10% and freeze wages in 2025 and 2026.

Foreign media quoted reports that Cavallo's comments marked a significant escalation of the conflict between mass workers and management. the group faces severe pressure from high energy and labor costs, fierce competition in Asian markets, weak demand in Europe and China, and slower-than-expected electrification transformation. At the same time, it also puts further pressure on the German government to take action to revive the economy. It is understood that Volkswagen will make recommendations on how to cut labor costs on October 30 local time and conduct a second round of labor negotiations with workers.

It is understood that Volkswagen currently has about 65 employees worldwide, of which 300000 are in Germany. Foreign media pointed out that trade unions have great influence in Volkswagen, and labor representatives account for half of the seats on Volkswagen's supervisory board. In theory, they have the right to strike from December 1 as a means to further escalate the conflict.

On September 2, local time, Volkswagen issued a statement saying that in order to solve the problem of overcapacity and declining competitiveness, and to further cut costs, it will consider closing German factories, including a large car factory and a parts factory, involving Volkswagen Group's main passenger car brands. It is understood that this will be the first time that Volkswagen has closed a factory in Germany since its establishment in 1926, and the closure and compulsory layoffs of local factories in Germany will be completed by 2026. In response, Oliver Blume, chief executive of Volkswagen, said the group must take further measures in the face of a difficult economic environment, industry competition and the weakening competitiveness of Germany as a manufacturing centre.

Earlier, Volkswagen announced a cost-cutting plan to save 10 billion euros (78.67 billion yuan) by 2026 and set a target of an operating profit margin of 6.5 percent, but the return on sales of the Volkswagen brand fell to 2.3 percent in the first half of 2024.

Volkswagen Group's global sales in the first three quarters of 2024 were 6.5243 million, down 2.8 per cent from a year earlier, including 2.1763 million in the third quarter, down 7.1 per cent from a year earlier, according to data. The decline in Volkswagen Group's global sales is mainly due to the Chinese market, where growth in the Americas is offset by declines in Western Europe and China. Data show that China is Volkswagen Group's largest single market in the world, with sales of 2.0566 million vehicles in the first three quarters of 2024, accounting for 31.5% of global sales, but the market sales fell 10.2% year-on-year, the largest decline in sales. In addition, Volkswagen sales in Western Europe fell 0.7% to 2.4244 million vehicles. For comparison, Volkswagen grew in North America, South America, the Middle East / Africa, of which South America grew 14.6% year-on-year, but because the market was far smaller than the Chinese market, even growth failed to offset the decline in the Chinese market.

Not long ago, it was revealed that Volkswagen China is laying off staff, mainly related to the imported car business, involving the Volkswagen Import Automobile (China) sales Company (VGIC), with nearly 100 layoffs. Volkswagen China has given employees two options in this round of layoffs, the first is for Beijing to leave to work in Hefei, and the second is to lay off staff directly and give compensation to the highest Nintendo 6. It is important to note that not everyone can get Never6 compensation. The main criteria are regular employees who need to work at Volkswagen for many years. "[imported cars] do not sell well and do not need too much manpower support, so layoffs are normal, and the imported car business has experienced many layoffs before," said a person familiar with the matter. in the future, the imported car business may go to Volkswagen Anhui, where Volkswagen Anhui will sell the Touareg brand. "

As Europe's largest carmaker, Volkswagen is also facing challenges, especially in the Chinese market. As the EU imposes import tariffs on Chinese-made electric cars, European carmakers such as Volkswagen Group will have to cope with rising trade tensions between China and the EU. Volkswagen is considering closing its German plant for the first time and cutting its performance forecast because of weak demand in Europe, fierce competition from the Chinese market, challenges posed by car electrification and high costs in Germany. Earlier, Volkswagen Group cut its full-year sales forecast for the second time in three months and is expected to deliver about 9 million vehicles this year, down from a year earlier.

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