German Unions Warn Volkswagen of Major Resistance Over Restructuring Plans
Volkswagen Faces Union Backlash Amid Restructuring Efforts
By Rachel More and Christina Amann
Union's Warning to Volkswagen Management
DRESDEN, Germany, Aug 31 (Reuters) - Germany's largest union, IG Metall, on Monday warned of maximum resistance to any efforts by Volkswagen to unwind a previously agreed restructuring package, stopping short of threatening strikes ahead of a crucial board meeting at the end of the week.
Volkswagen's management and unions have been trading blows since July over what could become the automaker's biggest overhaul to date and include plant closures, the carve-out of some divisions and another 50,000 layoffs.
This would come less than two years after the most recent package was agreed, which followed months of crunch talks as well as warning strikes as Europe's top carmaker tries to tackle tariffs, Asian rivals and a weak Chinese market.
Statements from Union Leaders
"I can only warn you: If the board tries to call this agreement into question again, then the factory floors will be up in arms at all our sites," Thorsten Groeger told workers at a staff gathering in Hanover, one of the sites that faces closure.
"We will oppose it with all our might."
Upcoming Supervisory Board Meeting
Volkswagen's supervisory board will meet on Friday to vote on what currently are three rival restructuring proposals, raising the chances of a full escalation that could result in an extraordinary shareholder meeting.
Financial Implications and Job Security
The group's finance chief, Arno Antlitz, also speaking at the meeting, said the group would do everything in its power to safeguard jobs as effectively as possible, still warning there was no viable follow-up production plan for the factories in Hanover, Emden, Neckarsulm and Zwickau.
Cost Disadvantages of Maintaining Current Production
Antlitz said if excess capacity were not cut and production at the sites were to continue as before it would result in a permanent cost disadvantage of around €1.5 billion ($1.74 billion) per year.
Political and Regional Reactions
Given Volkswagen's role as one of Germany's biggest private employers, the crisis has caused regional state heads to weigh in, concerned that plant closures in their region could hurt their position as the far-right AfD keeps climbing in the polls.
Statements from Saxony State Leader
Michael Kretschmer, the state leader of Saxony, where Volkswagen's Zwickau plant is located, said the group's workers, management and political leaders must work together to minimise the impact of job and capacity cuts.
"We all need to work together on this," Kretschmer told Reuters. "It simply has to become better, easier, and more cost-effective to manufacture in Germany," he said.
Additional Information
($1 = 0.8622 euros)
(Writing by Christoph Steitz, Editing by Miranda Murray, Kirsten Donovan and Tomasz Janowski)
