Volkswagen Management and Works Council Address Employees at Assembly

Wed 5th Feb, 2025

In a significant gathering, Volkswagen's management and the works council convened for the first employee assembly following their recent tariff agreement reached in December. This meeting comes in the wake of a challenging negotiation process with IG Metall, reflecting ongoing efforts to balance corporate restructuring needs with employee welfare.

Key figures at the assembly included Works Council Chair Daniela Cavallo and Brand Chief Thomas Schäfer, who both face the task of justifying the agreed-upon cost-cutting measures. Previous meetings had witnessed considerable pushback from employees regarding the company's austerity plans, necessitating a delicate presentation of the recent restructuring agreement.

Cavallo acknowledged that while the tariff compromise includes several benefits for workers, it also introduces painful concessions. The agreement, formalized on December 20, outlines a plan to eliminate 35,000 jobs in Germany by 2030. In exchange, Volkswagen committed to refraining from plant closures and dismissals, previously deemed non-negotiable by both the union and the works council. Additionally, the employment security provisions that had been previously revoked by Volkswagen were reinstated and extended to 2030.

However, there is skepticism among employees regarding the rationale behind financial sacrifices aimed at preserving other sites. Reports indicate that workers are expected to endure significant reductions in benefits, including cuts to vacation pay, various bonuses, and allowances. Moreover, salary increases have been temporarily suspended, and the internal wage structure is set to be realigned with the lower industry standards by 2027.

Unlike past assemblies where Cavallo rallied opposition against corporate cost-cutting strategies, this occasion may see a mixed reception from the workforce, with expectations of dissent among employees. Despite acknowledging that future growth may not be as robust as in the past, Cavallo reassured attendees that the adjustments to the tariff structure do not signify the end of the existing internal wage agreements.

Notably, CEO Oliver Blume will not address the assembly directly this time, although he is anticipated to be present. During the previous meeting, Blume faced significant criticism from employees, highlighting the challenging atmosphere surrounding the ongoing negotiations.

The works council is preparing for a large turnout, anticipating interest from around 60,000 employees at the main plant. To accommodate those unable to secure a seat indoors, the assembly will be broadcast on a large screen outside the facility.


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