German Union Urges Caution on Chinese Carmakers Using Volkswagen Plants
Union and Industry Perspectives on Chinese Partnerships
By Christina Amann and Rachel More
Union's Stance on Chinese Automakers
BERLIN, May 11 (Reuters) - Germany's powerful IG Metall union is not opposed to Volkswagen potentially opening under-used plants to Chinese automakers but believes any such move should be assessed very carefully, a union spokesperson told Reuters on Monday.
"We do not reject such ideas outright. Each specific case must be carefully evaluated," the spokesperson said.
Conditions for Collaboration
"However, it is crucial that they complement Volkswagen's independent industrial strategy rather than replace it, and under no circumstances should they take the place of planned investments and vehicle projects," the person added.
Volkswagen's Cost-Cutting and Strategic Moves
Volkswagen CEO Oliver Blume is working to cut costs further at the sprawling German auto group, with Chinese partnerships emerging as one option to avoid closures of under-used plants in Europe.
Potential Sites for Collaboration
ZWICKAU COULD BE CANDIDATE FOR CHINA DEAL
Local politicians have also signalled openness to such partnerships as German industry grapples with weak demand and high costs, while Chinese players such as BYD and Geely look to expand in Europe.
Political Support for Partnerships
The state economy minister of Saxony, Dirk Panter, said in a newspaper interview on Monday that Volkswagen's Zwickau plant in eastern Germany could be a candidate for Chinese collaboration.
"It is better to further develop industrial expertise at VW in Saxony and secure production than to fight a losing battle and lose value creation," Panter of the centre-left SPD told the Bild newspaper.
"We have to move with the times," he said, calling China "an opportunity for Zwickau".
Volkswagen declined to comment on the report.
Labor Agreements and Future Outlook
Under a hard-won deal with unions in late 2024, Volkswagen agreed to cut 35,000 jobs in Germany while guaranteeing no plant closures in the country.
Blume has since vowed to ramp up cost-cutting after the group's operating profit more than halved last year as tariffs, Chinese competition and a halted shift to electric vehicles at sports car subsidiary Porsche eroded its margins.
Leveraging Existing Joint Ventures
A spokesperson for the Saxony state economy ministry said Panter is interested in leveraging Volkswagen's existing joint ventures in China, for example its partnership with state-owned carmaker SAIC.
Status of the Zwickau Plant
Zwickau, Volkswagen's first plant to transition fully to EV production, employed about 8,000 people as of late last year.
It is currently running at partial capacity, the ministry spokesperson said. Under Volkswagen's 2024 agreement, production there is to be scaled back further in coming years.
(Reporting by Christina Amann and Rachel More. Editing by Matthias Williams and Mark Potter)
