Layoffs at Volkswagen. Note from the plant’s Central Committee

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May the readers of the blog forgive us that the most pressing problems of the media in our country are not the subject of attention in order to focus attention on some interesting events occurring outside our borders. This is an event that was unthinkable many years ago – the entry into crisis of the powerful multinational company Volkswagen, a company associated with the brand of Germany and which, like the country as a whole, is faced with a very difficult panorama, against which, as usual, the ““ variable” resorts adjustments” to its production in the form of redundant staff and wage cuts at headquarters, as well as the possible relocation of the group’s products to other countries. The problem is that this affects a real business giant with a very high union density, where the DGB metalworkers’ federation, IG Metall, must demonstrate its collective strength.

In this blog we are going to address this conflict because it is very important for understanding the different economic structures in Europe that are being created on the basis of the energy and supply crisis caused by the war in Ukraine and which is particularly affecting Germany, and an important sign of this is the crisis in Volkswagen. In a future article we will look in detail at the problem of collective bargaining for different collective agreements in connection with different periods of overactivity, in order to give an account of the conflict’s vision in this first part, based on a note from the Volkswagen Central Factory Committee.

Germany’s biggest industrial giant is shocking its workforce with plans to downsize on a historic scale.

Wolfsburg – Germany’s biggest industrial giant, Volkswagen, is shocking its workers at its domestic VW factories with a plan to downsize on a historic scale: in exchange for job losses for tens of thousands of employees in its country, the Board of Directors wants to close at least three VW factories, downsize all remaining factories , sell the main premises and, on top of that, sharply reduce the wages of the remaining employees.

The board recently presented these plans to the General Works Council as a way out of the crisis, in negotiations independent of VW’s internal round of collective bargaining. As management continued to refuse to inform workers, representatives of local workers contacted them in parallel meetings held at ten German VW sites (Brunswick, Chemnitz, Dresden, Emden, Hanover, Kassel, Osnabrück, Wolfsburg, Salzgitter and Zwickau). According to first reports, tens of thousands of colleagues attended these meetings.

President of the General Committee of the company, Daniela Cavallo, He performed on the ground floor of Wolfsburg. The board of directors wants to close at least three VW plants in Germany. He argues that he will not be able to move forward without this reduction. The board also plans to downsize all remaining plants in Germany. “Specifically, this means eliminating even more products, volumes, shifts and entire assembly lines, far more than we have already done.” Cavallo emphasized: “All German VW factories suffer from this. “No one is safe.”

And he added: “The executive committee wants even more: it also wants to get rid of entire departments and divisions. And move the work done there overseas or outsource it entirely to external service providers. This outsourcing will affect all types of jobs, regardless of whether it is semi-skilled or graduate-skilled jobs. This means that none of us can feel safe here. The works council president warned of the dangers of rejecting the employer’s plan as a “collective bargaining tactic”. The largest German industrial group plans to begin liquidation in its country of origin. (…) These plans by the Board of Directors put tens of thousands of jobs at Volkswagen in Germany at risk.

Workers face a pay cut of approximately 18%.

Under these plans, remaining employees would have to accept steep pay cuts. The executive committee wants to forfeit 10% of the monthly salary of all employees, regardless of whether they are covered by the collective agreement, “Rate Plus” or management salary. This 10% will be permanent. (…) But that’s not all: after the 10% cut, there will be two rounds of wage freezes. Therefore, there will be no salary increases in 2025 and 2026,” said the president of the works council.

In addition, the company also wants to abolish the current monthly bonus of 167 euros agreed in collective bargaining. The result would be the following calculation of a standard production worker’s salary: €3,914 monthly salary plus a bonus of €167 = €4,081, which means that €167 corresponds to approximately 4 percent of the monthly salary. That plus a 10% cut plus two years of wage freezes at a 2% inflation target (ECB target) = a loss of about 18%. Depending on the weight of 167 euros, this value fluctuates slightly depending on the salary category.

The board also wants to cancel the management bonus at Tariff Plus, which corresponds to the level immediately below the level of personnel below the management level, which is determined in collective bargaining with the union representative, IG Metall. In addition, lump sum payments for 25 and 35 years of service guaranteed in the VW “Manteltarif” collective agreement will be cancelled.

Cavallo repeats his criticism of the board: There is no indication yet of a future plan.

In a speech to thousands of people on the Südstrasse (South Road) of the main plant, the works council president repeated her criticism of the lack of vision and strategy with which management at Europe’s largest car maker had been working for months. .without showing any idea other than plans to reduce staff and production: “The board of directors panics you, colleagues, and then disappears. For over a year, the board of directors did not communicate to us the goals of VW’s core brand. The Council is not honoring agreements, even planning round agreements, the value of which could not be greater here in the Group. And most importantly, two months after we vehemently demanded it, the Council still shows no sign of a plan for the future. Because the question of all questions remains unanswered: what are these cuts for if there is no sign of confidence on the other side? When there is still no plan of attack on the table, no vision for the future product portfolio and no idea of ​​how we can regain technological leadership. And thus the President of the General and Group Working Committee concluded: The Executive Committee is against us. (…) And, therefore, he is playing on the huge risk that things will soon escalate here. What I mean by that is that we stop talking and do what a team should do when they are afraid for their existence.”

Cavallo mentioned the upcoming second round of internal negotiations. Senior leaders may take advantage of this atmosphere on Wednesday to finally speak out on the matter. Of course, you can do this today. Or tomorrow. The main thing is that they will finally do it.”

The works council does not miss the opportunity to acknowledge the problems: politicians must also act

The chairman of the general and group works council emphasizes that the joint management at VW largely shares the view that there is an urgent need to act, but a unilateral austerity program will not change anything unless there is a recognizable vision for the future: “Of course, in the works council we We also know how things stand at the moment. This is serious across the sector. We have serious problems. We should contact them at Volkswagen. We often emphasized this at the works council. We are not that far from analyzing the problems. “But we are miles apart in our response to problems.”

He also appealed to politicians: “They need to wake up. It’s not enough to say they support VW workers. We need action. We need policymakers to come up with a comprehensive plan to end BEV mobility once and for all. And we also need a master plan for Germany as an industrial site. These are simply “prospects for the future.”

At the end of his speech, Cavallo once again called on management to explain themselves. Employers and unions will meet on Wednesday (October 30) for a second round of negotiations on VW’s new internal collective agreement. The interlocutors will hold talks at the Volkswagen Arena (VfL stadium) in Wolfsburg.

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Article published in the blog “According to Antonio Baylos”