VW plant in Wolfsburg threatens weakest production for decades

VW production in Wolfsburg

The weak utilization of the main plant has repeatedly caused disputes between the works council and management.

(Photo: Reuters)

Dusseldorf Volkswagen is coming under massive pressure because of the production interruptions caused by the lack of chips at its main plant in Wolfsburg. In the first nine months of the world’s largest automobile factory of the main brand VW, just over 300,000 vehicles rolled off the production line, an insider told Reuters on Wednesday. Volkswagen did not want to comment on it.

At first, “Die Zeit” reported about it in advance. “It would have to be a miracle if we were to reach the previous year’s level by the end of the year,” the weekly newspaper quoted an insider as saying. Last year, for the first time in over 60 years, less than half a million Golf, Tiguan, Touran and Tarraco cars were built in Wolfsburg. In 2021 the number could be less than 400,000.

The works council chairman Daniela Cavallo accused the management around CEO Herbert Diess of lack of concept: “We cannot yet see a plan from the company management how this crisis can be managed,” she told the newspaper.

The “future pact” agreed by the works council and company management at the end of 2016 stipulated that Wolfsburg should build at least 820,000 vehicles in 2020. In mid-2018, VW was still assuming a production volume of around one million vehicles. The factory reached its previous production record during the Beetle era in 1964 with almost 960,000 vehicles.

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The weak utilization of the main plant has repeatedly caused disputes between the works council and management. Most recently, CEO Diess provoked the employee representatives with statements about possible job cuts. According to Handelsblatt information, at the end of September he warned the supervisory board of the scenario of cutting up to 30,000 jobs in Germany. The works council then went to the barricades. VW then made it clear that there were no plans to cut jobs on the scale mentioned.

The Group’s parent plant has long been criticized for its low productivity. Several CEOs have complained about this, but have avoided a dispute because of the strong position of IG Metall. Diess and VW brand boss Ralf Brandstätter now want to modernize the Wolfsburg plant. They have declared the factory that Tesla is currently building in Brandenburg to be the model for the traditional plant.

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