German carmaker warns of stagnation in the European sector amid news of deeper-than-expected action
The German carmaker Volkswagen is planning to shut at least three factories in its home country, lay off thousands of workers and cut pay by 10%, according to the company’s union.
The deeper-than-expected cuts come as the company faces weak sales and slow expansion in the electric vehicle (EV) sector amid tough competition from Chinese manufacturers.
“The board wants to close at least three factories in Germany,” the works council chief, Daniela Cavallo, told employees at VW’s headquarters in Wolfsburg on Monday. Its remaining manufacturing sites will reduce capacity, she said, citing information provided by management.
As Europe’s top economy suffers a crisis in manufacturing and fears of mass unemployment, VW is aiming for a fundamental restructuring to cut costs. It had initially warned last month that it had the equivalent of two factories of extra capacity in Germany.
It should be highlighted that the tough competition from Chinese manufacturers is on the Chinese market. The increased tariffs won’t help on that. VW simply got outcompeted in China.
VW is still the most sold brand in Europe. Every time BYD sells one car in Europe, VW sells 74 cars Europe. That’s not the problem. It’s that the Chinese market used to be the largest market for VW, but now the party is over after 40 years.
Exports are risky like that. It’s difficult to blame the China for this when they have cheaper and more technology advanced vehicles available domestically. I hope VW can see the writing on the wall and up their game, but I fear that this market won’t ever come back. In my opinion they should focus on going back to the core idea of making smaller and cheaper cars available to the people, instead of making luxury car exports.
Some context from someone who lives in germany:
VW has for quite a while now failed to read the writing on the wall and join in on the growing market for electronic cars. All the while getting subsidies from the german government.
Now they cant compete anymore and even their regular cars are way to expensive for a lot of germans to buy. And the chinese manufacturers are pushing them even further out of a market they failed to enter by refusing to innovate years ago.
A lot of this reads over here like hostage taking: They want more subsidies for their failing company model, or they leave the country.
Failing to read the market… or shareholders wanting dividends rather than invest it in the companies future?
Alternatively, the German government nationalizes VW to keep the jobs, fires upper management and replace them with people that get the orders to make cheap/affordable EVs for the masses.
Fuck the shareholders.
Alternatively, the German government nationalizes VW
Too late the state of Lower Saxony and the work’s council together already have majority voting rights. By pure shares the Porsche/Piëch clan has a majority but the work’s council gets 50% - 1 seats on the board (generally the case for big German companies) so they can’t just dictate things.
That said the work’s council previously did agree to a severe downsizing, back when automation swept the industry they agreed to introduce it, opposing it would’ve meant the end of the company, but made sure that the most back-breaking jobs got automated first, and that staff reduction was done with early retirement and a stop to hiring, not massive layoffs. Something like this may happen again but the way that the executive council is acting right now – yeah I think their heads are going to roll. They’re acting as if the company wasn’t, ultimately, run by IG Metall (via works council and socdem state government).
Reminds me of what we go through with the big 3 in the us
Exactly what I was thinking.
I remember how GM did fuckall in the 90s while Honda and Toyota and even Hyundai ate their lunch.
Their plant in Chattanooga TN started making EV’s in 2022. My dad retired from VW and keeps tabs. In his opinion they still aren’t selling well.
The problem is the Chinese market, which has been a huge market for VW. That’s where they failed to come up with a viable competitor to the cheap EVs that are selling like hotcakes in China. Yes, the U.S. sales have been lackluster but that’s not what is driving VW’s woes. The U.S. is a relatively small market for VW.
They’re all mega expensive, arent’ they?
I feel like a huge mistake is making heavy, mega luxury EVs instead of pushing smaller-battery cars with a tiny (I’m talking like 2hp) backup generator.
I think the delusion that fuels this insanity is western car companies understand the future is no longer defined by visions of the car but they can’t admit it. They can’t make cheap, reliable ev commuter cars because from their perspective that would be admitting the truth they can not accept to themselves.
I don’t even think this has to do with money, surely there will be big markets in ev vehicles long into the future, rather it is about something deeper, it is about refusing to participate in any future that doesn’t unquestionably place cars at the center of it.
To western car execs a simple, reliable compact electric commuter car isn’t a car, zero percent of them drive anything other than sports cars and massive trucks/suvs and they see one of the fundamental utilities of a car is to seperate oneself from the city of dirty working class people between your mansion and executive suite office (who would actually benefit most from said practical small electric commuter cars).
I think the delusion that fuels this insanity is western car companies understand the future is no longer defined by visions of the car but they can’t admit it. They can’t make cheap, reliable ev commuter cars because from their perspective that would be admitting the truth they can not accept to themselves.
Eh. Especially because (at least European) car companies understand that public transport is a thing they’re focussing so damn much on upper market segments. “Commuter car” indeed does not feature in visions of the future, at least not prominently.
Right, they see the business of car sales as like horses for the rich and more crucially they see themselves as a luxury brand that associates itself with wealth via the inherent difficulty of owning and maintaining a large luxury car that excludes all but the rich. It is the same with Ralph Lauren and horses, polo in this case being analagous to the ridiculous high stakes driving fantasies luxury car commercials evoke.
$40,000 for ID4. I don’t know if that currently qualifies for the government rebates.
It’s so sad considering they just now managed to bring out the best EV on the market (ID.7) - and will refresh the older range to the same standard.
I remember reading somewhere that they have a subsidiary that was made to implement the software needed to run EVs, and another something to do with batteries. Both of these subsidiaries have appeared to be massive failures, though the reasons weren’t stated in the article I read. Were they just badly funded? Or were the people hired there resistant to switching to EVs?
I wonder where I’ve heard that before but I have NO fucKIng ideA. (I’m just being cryptic for fun)
Also, well, they illegally lied to us. Now being surprised (Pikachu face) I bought a Chinese car, I can have that for cheap.
Capitalism at its finest.
Didn’t the US VW union just jam through a huge raise?
Don’t see them listed on the cutting board.
I don’t see the name “Hungary” mentioned anywhere in the article.
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The Guardian - News Source Context (Click to view Full Report)
Information for The Guardian:
Wiki: reliable - There is consensus that The Guardian is generally reliable. The Guardian’s op-eds should be handled with WP:RSOPINION. Some editors believe The Guardian is biased or opinionated for politics. See also: The Guardian blogs.
Wiki: mixed - Most editors say that The Guardian blogs should be treated as newspaper blogs or opinion pieces due to reduced editorial oversight. Check the bottom of the article for a “blogposts” tag to determine whether the page is a blog post or a non-blog article. See also: The Guardian.
MBFC: Left-Center - Credibility: Medium - Factual Reporting: Mixed - United Kingdom
