Previous Volkswagen CEO Diess asserts that the company's cost-saving plan serves as a required breacher of societal taboos.
The beleaguered car manufacturer had effectively scrapped the so-called Forward Work Contract for job security by year-end, which had previously blocked layoffs until 2029. As per the human resources director of the main brand VW, Gunnar Kilian, the organization was forced to take this action due to present financial difficulties. Following a transitional phase, potential layoffs could be implemented from July 2025 if no alternative solution is reached.
Since joining VW, Diess had been advocating for this action, he mentioned. At the time, it was "perhaps premature" for the reductions, as numerous individuals argued that the company was thriving. However, current results show that the VW brand's "performance is poor," Diess said. "Most German VW sites' productivity doesn't measure up to the high wage costs, and administrative optimization offers substantial potential," he added. Lower Saxony's Prime Minister Stephan Weil (SPD) had asserted that Volkswagen now needed to shape up. "Absolutely correct. The company will also become more efficient and effective as a result," Diess concluded.
Diess is confident about Volkswagen's workforce. "Oliver Blume is doing an outstanding job - and the entire Volkswagen team," he praised, referring to Volkswagen's CEO. Blume is handling the restructuring "with a steady hand" and has "a good shot at succeeding in this task," Diess commented.
Last week, the top management of the main VW brand within the Volkswagen Group announced a stricter cost-cutting strategy, no longer ruling out factory closures and layoffs. On Tuesday, they announced the cancellation of a total of six work contracts by year-end. The IG Metall labor union then labeled this as a "groundbreaking assault on the shared historical industrial agreement."
The stricter cost-cutting strategy led to the cancellation of six work contracts by year-end, causing a stir with the IG Metall labor union who labeled it as a "groundbreaking assault on the shared historical industrial agreement." After this dismissal of contracts, potential layoffs could be implemented from July 2025 if no alternative solution is reached, as discussed by the human resources director Gunnar Kilian.
