Volkswagen promotes its financial savings plan using a handout.
To maintain its leading position, Volkswagen has implemented a stringent cost-cutting initiative. A day prior to the wage negotiations with IG Metall, the automaker is soliciting its employees' backing for the proposed reductions with a handout.
The struggling automotive giant Volkswagen is urging its staff to endorse its financial restructuring plan before the wage negotiations commence, as stated in the leaflet, which ntv.de obtained. Volkswagen, according to the leaflet, is producing excessively expensive in Germany. The company needs to enhance its productivity, lower labor costs, and maximize the use of its manufacturing facilities. "If we manage to tackle our challenges now, Volkswagen has a promising future ahead."
However, the German sector is currently facing competitiveness issues. In Europe, there's a decline of two million vehicles sold yearly compared to before the COVID-19 outbreak, and there's increased competition for a portion of the market, as per the leaflet.
The aforementioned actions in Wolfsburg, Hannover, Braunschweig, Salzgitter, Emden, and Kassel are happening a day before the wage negotiations with IG Metall commences. These negotiations will not only cover wage agreements but also reconsidered contracts on job security, apprenticeship transfers, and pay for temporary workers.
Synonym for the current location issues
Volkswagen CEO Oliver Blume recently spoke to ZDF, stating his aim for a swift deal on a cost-saving package. "Our ambition is to set up a package this year," he said, adding that it would encompass all expenses from development to production and distribution.
Chief economists interpret Volkswagen's enhanced cost-cutting measures as a metaphor for Germany's current location problems. "This further illustrates the long-term impact of years of economic stagnation and structural change in a no-growth economy," said ING's chief economist Carsten Brzeski. "The automotive industry isn't just symbolically important for Germany but also a critical sector for the economy."
Volkswagen is actively working to reduce its expenses in the manufacturing of motor vehicles in Germany, as mentioned in the leaflet. The company is urging its employees to support its financial restructuring plan, which includes lowering labor costs and enhancing productivity.
The increased competition and decline in vehicle sales in Europe are contributing to the current location issues faced by Volkswagen, as noted by ING's chief economist Carsten Brzeski. These challenges require the company to implement stringent cost-cutting initiatives to remain competitive.
