VW calculates production outweighs demand by about two factories

Group CFO Antlitz said: “We are short by around 500,000 vehicle sales, corresponding to production numbers for two plants. And that has nothing to do with our products or poor sales performance. The market is simply no longer there.”

The top manager also outlined a timetable for VW’s turnaround. “We still have a year, maybe two, to turn things around. But we have to use this time well,” he said. “For some time now, we have been spending more money on the brand than we are earning. That doesn’t work in the long term!”

Other managers had already used alarming language in the past; VW brand boss Thomas Schäfer, for example, spoke of a “burning roof.” However, such statements were usually made in smaller groups, for instance, in front of executives. Antlitz appealed to thousands of employees – the works council said more than 16,000 employees participated in the meeting.

Management pushes for cost reductions

According to reports, the mood was agitated after Volkswagen no longer categorically ruled out the closure of German plants on Monday. As reported by the German publication Der Spiegel, posters were held up at the works meeting with slogans such as ‘Hands off job security’ or ‘We are Volkswagen, you are not!’ as the members of the Board of Management took their seats on the stage. A picture published by DPA shows that Group CEO Oliver Blume also took part in the meeting in Wolfsburg alongside brand boss Schäfer.

“If we manage to sustainably reduce our costs and invest in a firework of new models that competitors and customers have never seen before – then we will be the ones who have created the conditions for the next generations to be able to work for Volkswagen here in Germany,” Schäfer said at the meeting in Hall 11. A quote from Blume has not yet been made public.

Although further statements from the VW management have been reported, the exact plans remain unclear. On Monday, there was talk that a vehicle and a component plant were on the brink of collapse. However, from Antlitz’s speech about 500,000 missing vehicles, it can be deduced that it will most likely be two vehicle plants – but at the Group level. It remains to be seen whether the Audi plant in Brussels, which is facing closure, is included in this figure. The Belgian plant is designed for 120,000 units, but Audi will build a maximum of 25,000 Q8 e-tron units there this year. The situation is so confusing that it is unclear whether the VW plants in Lower Saxony are safe. VW already cancelled a battery workshop for journalists in Salzgitter, which was planned for next week.

Prior to the speeches by the members of the Board of Management, Works Council Chairwoman Daniela Cavallo announced fierce resistance to the cost-cutting plans and plant closures: “I will say it again very clearly here in Hall 11 for everyone on the Board of Management bench to take note of: With me, Daniela Cavallo, Chairwoman of the General and Group Works Council of Volkswagen AG, there will be no plant closures in this country.” Cavallo also spoke of a “declaration of bankruptcy” by the Board of Management, stating that VW “is not suffering precisely because of its German sites and German personnel costs,” but because the Board of Management is not doing its job.

Cavallo also called for a “master plan for future viability 2025 – 2030 – 2035,” including concrete demands: “Examples of this are new models in the volume segment. But also to utilise the installed capacities of the factories as fully as possible and thus reduce fixed costs. It is the only way to emerge from this situation stronger and sustainably successful. Anything else is blind saving from one quarter to the next.”

German government announces support

One of Cavallo’s statements will probably only take full effect in the coming weeks and months: “There is currently no common understanding of what the way out of the crisis should look like.” It doesn’t sound like the powerful VW workforce will agree with this; the quick decisions Antlitz is striving for are unlikely to be made unanimously. Wolfsburg is facing a heated autumn.

Not only the works council, but also German politicians want to prevent a plant closure at VW. “It is now up to us to ensure that the sites, and indeed all sites, are secured and that compulsory redundancies are avoided,” said German Labour Minister Hubertus Heil (SPD) in response to the situation at VW. To secure the sites, negotiations must now be politically flanked.

However, politicians do not want to shake up the plans and investments relating to electric mobility. “That would certainly be the wrong approach,” said Lower Saxony’s Minister of Economic Affairs Olaf Lies (SPD), who also sits on the VW Supervisory Board. In the minister’s view, the alternative would be to sell combustion engines for as long as possible, which would mean missing the boat at some point.

spiegel.de, automobilwoche.de (both in German), web.de (quote Hubertus Heil; in German), autohaus.de (quote Olaf Lies; in German)