Drama at Volkswagen After CEO Suggests 30,000 Job Cuts

Volkswagen CEO Herbert Diess has been facing off with the company’s German workforce for weeks over the changing nature of the business. VW vowed to transition itself toward an all-electric lineup following the 2015 diesel emissions scandal. But the necessary steps to get there haven’t been universally appreciated.

The general assumption has always been that electric vehicles would result in massive layoffs across the industry by nature of their needing fewer parts than internal combustion vehicles. But Volkswagen seems worried that it’s falling behind smaller rivals and needs to take decisive action to make sure it’s not outdone by firms operating in the United States and China. The proposed solution is an industrial overhaul designed to fast-track VW’s electrification goals. Unfortunately, German labor unions are convinced that this plan would incorporate massive layoffs and have become disinclined to offer their support. The issue worsened in September when Diess told the supervisory board that a slower-than-desired transition to EVs could result in 30,000 fewer jobs.

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Union Dos and Don'ts: Volkswagen Chops Salaries and Bonuses for Works Council Amid Investigation

Volkswagen has slashed salaries and suspended the bonuses of 14 members of its works council, including council head Bernd Osterloh, as officials investigate alleged overpayments. In May, it was made public that German prosecutors were looking into current and former executives at VW under suspicions that they paid the labor chief an “excessive” salary.

This was followed by a November raid, after which the council claimed the probe didn’t “target Osterloh.” Members specified that all payments were in line with Germany’s legal guidelines. The offices of VW’s chief financial officer, Frank Witter, and personnel director Karlheinz Blessing were also searched.

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Germany Loves a Good Probe: VW Raided by Prosecutors Over Labor Chief's Salary

Curious as to whether Volkswagen’s management agreed to “excessive” payments of its chief labor representative, German prosecutors raided the carmaker’s headquarters. While a raid certainly sounds bad, it seems like the only way the country’s government bothers to acquire information from automotive manufacturers anymore.

This year alone, VW has been subjected to numerous raids relating to its diesel emission scandal and possible pricing collusion between BMW and Daimler. While one imagines a swarm of suits, backed by uniformed officers, as employees frantically shred documents, the frequency of such impromptu investigations probably just leaves staffers annoyed. I’m starting to think the German government likes showing up unannounced more than the country’s car builders enjoy illicit activities.

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  • Bryan I used Costco a while back, and didn't care for it - you still wind up going to the dealership.The last time I bought a new car I used an actual car broker and I'll use one again the next time. Whatever they charged me was the best money I spent that year.
  • SCE to AUX Just add a split rear window, and the hybrid sins will be forgiven.
  • SCE to AUX Just add a split rear window, and the hybrid sins will be forgiven.
  • SCE to AUX Maybe those union dues will help soften the landing. Employment there used to be 4000 people, and the plant has been at risk for 15 years. Stellantis did recently say that it would be trimming dead wood so it could rebuild the company. The Cherokee is finished, but I bet the plant reopens with a smaller workforce once Stellantis figures out what to do with it.
  • Zipper69 The Bronco is a soft option and has the style that the Jeep lacks. The actual ability of the respective vehicles is irrelevant, they "compete" on image alone. The Bronco is new and trendy and production can't keep pace with demand