Volkswagen (OTCPK:VLKAF)(OTC:VLKPF)(OTCPK:VWAGY)(OTCPK:VWAPY) has “one, maybe two” years to turn around its namesake brand, Chief Financial Officer Arno Antlitz said this week, as the German auto giant considers closing its first plants in the country, Reuters reported.
Antlitz met with boos of “bye-bye” in German as he told about 25,000 workers at the company’s headquarters in Wolfsburg on Wednesday that they needed to work with management to help it cut spending to help VW survive its shift to electric vehicles, the report said.
The finance chief was quoted as saying the European car market had contracted following the COVID-19 pandemic and Volkswagen was seeing a demand shortfall of 500,000 vehicles, which he said was roughly equal to two plants.
“The market is simply not there,” he was quoted as saying, adding that he did not expect VW brand sales to recover and that the company had “one, maybe two” years to cut spending and adjust production.
“There are no more checks coming from China,” Chief Executive Oliver Blume said, according to a person who was reportedly present at the meeting. China is Volkswagen’s biggest market.
The head of the Volkswagen works council, Daniela Cavallo, said that management at Volkswagen had “significantly damaged trust.” The IG Metall union did not rule out the possibility of going on strike and saw no reason to cut its wage demands ahead of upcoming contract negotiations, Reuters reported.
“Management has broken a taboo in an important way and workers are ready to be there when we call them,” Cavallo was quoted as saying, vowing to block plant closures.
According to Reuters, Cavallo pressed Blume to explain why Volkswagen planned to prioritise its €5 billion ($5.54 billion) partnership with US electric vehicle maker Rivian (RIVN) over German jobs.
A spokesman for Chancellor Olaf Scholz said the leader had spoken to Volkswagen’s management and works council and “is clear about the importance” of the carmaker.