Volkswagen (VW), a major German automaker, is facing significant opposition, particularly from the workers’ union. The union wants to close some of the company’s units and terminate the job security program, which has been in place since 1994. The company’s management wishes to close some of the inefficient departments, which would entail employee layoffs. At the workers’ council meeting on Wednesday, IG Metall, the workers’ union, declared that it would oppose the proposal.
Restructuring and downsizing are necessary to deal with the new competitive landscape brought about by the shift to electric vehicles, particularly from China’s automakers. However, Oliver Blume should have made the choice a long time ago.
Volkswagen’s percentage has been reduced to 21%. Despite being made in China, the German automaker’s special plea that it is not a 100% Chinese product does not appear to be very persuasive. However, the issue is that Germany’s high labour costs make the country less competitive in the auto industry. Additionally, Volkswagen plans to reduce expenses by closing some domestic units to finance its $20 billion in new projects. The management argues that it has no other option but to fund upcoming initiatives.
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