Volkswagen on Wednesday defended the unprecedented austerity measures being prepared at the group, with possible plant closures, saying falling sales had left Europe’s top carmaker with around two extra factories.
A European market that has not yet recovered from Covid
Car sales in Europe are far from back to their pre-Covid-19 level, with a deficit of around two million units, stressed Arno Antlitz, the group’s chief financial officer, during a stormy meeting with employees in Wolfsburg, the birthplace of the German giant.
For Volkswagen, which has almost a quarter of the market share in Europe, this represents a “shortage of around 500,000 cars, the equivalent of around two factories,” he continued, according to extracts of his speech broadcast to the press.
In 2019, new car sales peaked at 15.3 million units in Europe (EU + UK), up from 12.8 million units last year, a difference of 19%.
One or two years “to get things back on track”
“We need to increase productivity and reduce costs. We still have a year, or even two, to get things back on track,” he said, although the details of the savings plan are not yet known.
Several thousand employees, often dressed in overalls, greeted the group’s management speeches with whistles and banners, according to television images.
Volkswagen announced this week that it was considering an economic plan unprecedented in the company’s history, with the closure of factories in Germany and layoffs, creating a shockwave in the first European economy of which the company is one of the foils.
The German group’s union mobilized
A confrontation with the group’s union, one of the most powerful in the country, is looming.
Daniela Cavallo, VW’s chief employee representative and a member of the supervisory board, warned that the group’s management would have to “face fierce resistance from staff.”
“With me, as chairman of the central works council and the group works council, there will be no factory closures in our country,” he insisted, addressing employees during the meeting.
The group is “not in trouble because of its German headquarters and the costs of German personnel,” said Daniela Cavallo, but because “management is not doing its job,” she complained, criticising the choice of management to lead the essential transition to electric power.
Source: BFM TV
