The Volkswagen Crisis: A Perfect Storm Hits Europe’s Biggest Carmaker
Just over a year ago, Daniela Cavallo, the VW Works Council Chairwoman, warned of a looming crisis at Europe’s largest carmaker. Now, VW management has confirmed the closure of one or possibly two car plants in Germany and the cutting of thousands of jobs due to declining sales.
These drastic measures have sent shockwaves through VW’s workforce, adding uncertainty for the 120,000 employees at the VW brand in Germany. The unfolding crisis has even caught the attention of German politics, as Lower Saxony – where VW is based – holds a 20% stake in the company.
The Changing Times
Decades of unique labor agreements at VW may be coming to an end as the company faces challenges to its profitability, including rising costs. With the scrapping of a 35-year job guarantee, workers now face the possibility of plant closures and layoffs.
As the European car market faces a decline, German carmakers are struggling to compete with Chinese rivals who have made significant strides in electric vehicle technology. Additionally, emission targets set by the EU pose a further threat to the future of European carmakers.