- "Economic analysis" signals potential hazards associated with government interventions through financial support
Financial Analyst Veronika Grimm, a part of Germany's government advisory committee, advises against government intervention to save struggling sites, considering Volkswagen's predicament. "The state needs to keep its distance," she said to 'Rheinische Post'. "Shutdowns might indeed happen. The automobile industry is undergoing a significant transformation."
Although she acknowledges that the state plays a role in facilitating this transformation, she believes that directly saving the automobile sector isn't the appropriate approach.
On Monday, Europe's largest automaker, Volkswagen, revealed potential plant closures and layoffs as part of a cost-saving initiative for their primary VW brand, which were previously off the table. The company is contemplating breaking the contract on job security that has been in effect since 1994. This agreement had prohibited job cuts until 2029. The works council and labor unions have signaled significant opposition to these changes.
Despite her advice against government intervention, a rescue attempt by the state could potentially be initiated if Volkswagen's situation worsens significantly, threatening the entire automobile sector. However, Veronika Grimm continues to advocate for a hands-off approach.
