Volkswagen AG is preparing for tense negotiations with labor unions after warning that it may have to close some of its plants in Germany due to a shift towards electric vehicles, increasing automation, and changes in consumer preferences. The auto giant stated that its German plants are at risk if they don’t adapt to these changes promptly.
It’s part of Volkswagen’s broader plan to streamline operations and phase out combustion-engine vehicles over the next decade. The carmaker also cited increasing pressure to meet stringent emissions standards and the growing competition from electric car manufacturers as reasons for the potential closures. The company has already announced that it plans to build its ID.3 electric model in its Wolfsburg home plant but needs to hash out how many jobs will be affected by the transition.
Volkswagen’s labor unions, which hold half the seats on the company’s supervisory board, are expected to resist any closures and job cuts, setting the stage for challenging negotiations. The labor unions have argued that the change to electric vehicles should not lead to job losses and that the company should instead invest in retraining its workers.
The ultimate decision will likely impact not only Volkswagen’s workforce but also the broader auto industry, as other carmakers grapple with similar challenges. Volkswagen’s transition to electric vehicles and its determination to stay competitive globally underline the profound reshaping happening in the auto industry at large. The outcome of Volkswagen’s negotiations will be closely watched by industry observers worldwide.
