Volkswagen Faces Pressure to Shift China Model Production to Germany, Secure Jobs
Volkswagen's Production Strategy and Impact on German Jobs
Potential Job Security Through Production Shift
June 28 (Reuters) - Volkswagen could secure jobs in Germany if it produced auto models there that it currently develops in China, the premier of the German state of Lower Saxony, a major shareholder, was quoted as saying.
Lower Saxony premier Olaf Lies made his remarks to German news agency DPA following reports on Friday that the embattled carmaking giant is considering shutting four German factories and ramping up job cuts to as many as 100,000.
Stabilizing Capacity Utilization and Innovation
"If we produced vehicles here that we currently make in China, we could stabilize capacity utilization of our plants," Lies said in an interview published at the weekend.
"This would also create the opportunity for new development and innovation at our locations. To me, it's about stabilizing employment and capacity utilization at our plants, instead of watching others build new plants outside of Germany."
Volkswagen's Stakeholders and Market Challenges
Lower Saxony's Role and Influence
Lower Saxony, where Volkswagen is based and where it operates five of its six western German assembly plants, has a 20% voting stake in the company.
Competitive and Economic Pressures
Volkswagen is under pressure from Chinese rivals, U.S. import tariffs, as well as dwindling demand in Europe, which the firm has said makes its business model unsustainable.
Exploring New Production Opportunities
Lies, a member of the centre-left Social Democrats, had floated the idea of exploring production of cars made for the Chinese market in Germany after a visit to China in April.
Subsidiary Moves: Porsche's Production Shift
On Saturday, the Frankfurter Allgemeine Zeitung newspaper reported that Volkswagen's subsidiary Porsche is looking at shifting production of its Cayenne SUV from Slovakia to its Leipzig plant in Germany to boost capacity utilisation.
(Writing by Dave GrahamEditing by Christina Fincher)
