Dusseldorf “Planning round” is a household word in Wolfsburg. Behind this is the annual ritual with which the Volkswagen Supervisory Board determines the investment planning for the next five years in mid-November.
A lot of money is involved: a three-digit billion amount has to be distributed across around 120 locations worldwide. This also determines the plant occupancy for the next few years. Which factory will produce which car and thus has a secure future?
There are still just under six weeks until the VW supervisory board will decide on the next investment plan on November 12th. And it is already clear: there is a considerable dispute between management and the works council over the Wolfsburg parent plant. The workers fear for the future of the largest VW factory and therefore demand quick commitments for further models.
“The location needs a faster route to e-mobility,” demanded works council chairman Daniela Cavallo at the weekend. Wolfsburg has so far been left out when converting the Volkswagen factories to new electric models. In recent years, other locations such as Zwickau, Emden and Hanover had been given preference – also with the consent of the employee representatives on the VW supervisory board.
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VW parent plant in Wolfsburg: Missed the connection to the electric age?
But worries are growing among the Wolfsburg workforce that the main plant will miss the connection to the new Elektrozeit. So far, the company has given the promise that the second generation of VW electric cars (called the “Trinity” project within the group) will roll off the assembly line in Wolfsburg. Production would start in 2026, i.e. in five years.
The employees are now insisting that Wolfsburg will get its first e-car much earlier, ideally in 2024. “The development of the numbers can already tell that the Trinity will not be sufficient to fully utilize the plant,” emphasized Deputy Works Council Chairman Gerardo Scarpino. Wolfsburg needs an additional “voluminous model”, ie with high numbers, probably in the low six-digit range.
The group does not want to comment on the new demands of the works council. In corporate circles, however, the works council’s new demand is causing a lack of understanding. After all, employee representatives agreed four years ago that Wolfsburg’s turn to electrification would be comparatively late.
At the end of last week, CEO Herbert Diess emphasized at a meeting with executives: “Trinity will revolutionize Wolfsburg” – and thus enter into direct competition with the new German factory of US competitor Tesla not far from Berlin.
VW boss Diess wants to win competition against Tesla
Diess had repeatedly pointed out in the past that the Wolfsburg plant had to become significantly more productive in order to be able to hold its own against Tesla. He appealed to his top managers to take the challenger from the USA really seriously.
An estimated 20,000 people work in vehicle production at the main VW plant. The factory in Wolfsburg essentially lives from two vehicles, the endurance runner Golf and the SUV model Tiguan.
Both cars are actually guarantees of success for Volkswagen. But with increasing electrification, these two cars will no longer be enough to keep the Wolfsburg factory running at full capacity. The Golf and Tiguan are only available as plug-in hybrids, not as fully electric versions.
Three years ago, Volkswagen was planning to expand annual production at the Wolfsburg main plant from around 800,000 to one million vehicles. But in reality exactly the opposite has happened, the annual production figures keep moving downwards.
In 2019, without special effects from the corona pandemic and lack of chips, Wolfsburg had reached around 700,000 cars. In 2020 there were around 500,000 vehicles due to the corona. Due to a lack of semiconductors and the associated short-time work, Volkswagen is unlikely to even manage half a million in Wolfsburg this year.
VW Golf has reached its zenith as a best seller
The VW group had stopped the Golf production in North America and shifted the production volume to Wolfsburg. But even these additional quantities are no longer sufficient to fill the main plant permanently. After more than 40 years, the golf has just passed its zenith. For decades, the car has always been the best-selling model in Europe. But meanwhile the Golf is being lapped more and more frequently by competitors – as most recently in July and August of this year.
The latest production downtimes caused by the lack of chips have made the Wolfsburg workforce even more insecure. In the past, VW employees are used to short-time work for weeks at most, but not for months. “You do not know such long short-time working phases,” said works council boss Cavallo.
Even if Wolfsburg is only one of around 120 production sites of the group worldwide and other factories also have to be fully utilized: The main plant then enjoys high priority because it stands for the roots and tradition of the entire company.
Strong union roots at the Wolfsburg location
In addition, the power and influence of the works council is based on its strong position in Wolfsburg. In no other city in Germany is there a larger local government of IG Metall. The top representatives of the works council always come from Wolfsburg and not from strong corporate subsidiaries such as Audi and Porsche. This also applies to the current works council chairman Daniela Cavallo and her predecessor Bernd Osterloh.
This strong roots in Wolfsburg is an obligation for Cavallo, the new head of the works council, who has been in office since spring, to stand up for the group’s largest factory in particular. It only has power and influence over the entire company if the workforce in Wolfsburg stands behind it.
Next spring, new works councils will be elected all over Germany – not just at Volkswagen. Daniela Cavallo had taken over her new post from Bernd Osterloh in the spring, without extensive approval from the union base. The elections will therefore be an important test run for the works council chairperson.
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