Volkswagen exhibits an excessively enthusiastic approach.
VW scraps long-standing job security promise for its main brand. Rumors of plant shutdowns in Germany surface for the first time. Industry expert Frank Schwope from Hannover's University of Applied Sciences and Arts doesn't think VW is in dire straits. He sees a lot of "negotiation talk" in the statements from both management and employee representatives.
ntv.de: Major corporations often implement cost-reduction strategies, including plant closures. But why does this situation with VW feel different?
Frank Schwope: We haven't seen such significant potential job reductions at Volkswagen for many years. Yet, some exaggeration is happening. The company has been profitable recently, and this year, it's expected to post billions in profits. Layoffs or plant closures are sensitive topics.
The announcement of these drastic measures caught everyone off guard. Were there no hints that something of this magnitude was on the horizon?
The hints have been present for several months and years. Major job cuts have been postponed for a long time. In fact, the company has grown in recent years. And considering that its former CEO wanted to build a new plant in Wolfsburg, it's surprising.
The management's proposed actions seem extreme. Is Volkswagen really struggling that much?
Volkswagen is not in a dire situation, having earned 22.6 billion Euros in operating profit last year and expected to have billions left at year's end. Yet, cutting costs in good times is advantages over bad ones. The current situation is part of the negotiation talk between the board and the works council.
Is management simply reacting to problems, or is this part of a long-term strategy to shape the company's future?
Cost-cutting measures are inevitable in the automotive industry in the coming years. Automakers, more than suppliers, can handle these measures. The industry relies heavily on political decisions, such as those related to electric vehicles, and must continually adapt to market changes.
The works council views the management's announcement as a declaration of war. Is Volkswagen now embroiled in a full-blown power struggle?
These strong words are just part of the negotiation talk and should not be taken too seriously. After all, the Volkswagen Group is still posting profits.
Can this vast, intricate corporation still be saved?
This brand conglomerate can be challenging to manage, especially with divisions like Traton or Ducati that the company doesn't necessarily need. Selling these assets would bring in funds and alleviate the board's burden.
Interview with Frank Schwope by Max Borowski
The recent talk of group restructuring at Volkswagen might be a response to future market changes or a long-term strategy to shape its future. Despite the works council's strong words, the Volkswagen Group continues to post profits.
In the context of industry-wide cost-cutting measures, the group restructuring at Volkswagen could be seen as a proactive step, ensuringadvantages in both good and challenging times.
