Volkswagen's proposed restructuring plan has been put on hold due to union representatives blocking job cuts. The plan aimed to reduce global production capacity from 12 million units per year to 9 million units per year, and model counts by up to 50 percent across its various brands.
According to two company sources who spoke with Reuters, the supervisory board committee came down 12-7 against the proposal. The initial plan drew immediate ire from the automaker's German workforce, with the nation's largest union, IG Metall, rallying its members across VW's production facilities.
View Price on AmazonCEO Oliver Blume had reiterated plans to reduce global production capacity and job cuts involving up to 100,000 employees and the closure of up to four German production facilities were also reportedly on the table. That would have been the largest labor-related move in the brand's history, so it's not surprising that the unionized committee members pushed back on that plan.
Blume has a difficult task ahead. The chief executive is trying to streamline the behemoth that is the VW Group as the industry continues to face headwinds from the rise of Chinese auto production and an unfavorable tariff policy from the United States. This isn't just a move for increased profitability, but one that could determine the success of the company and its many brands into the future.
Without reaching some sort of compromise with the labor reps, this could become a rather protracted issue for the VW group as a whole. While the automaker's contract with the unions include strike protections for the automaker, leadership has stated that they will increase "industrial action" if Volkswagen moves against job security, according to Reuters.
Source: roadandtrack.com
