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The Volkswagen Group is doing well with sales of electric cars in its home region, but low prices and market volatility in China and North America have been hurting it. Europe’s largest carmaker, which also owns brands including Audi, Porsche, Skoda, and Lamborghini, has seen its profits erode, and yesterday the company’s board of directors was presented with a plan to address this. An expected factory closures and layoffs not included – not in the VW Group’s corporate vocabulary – but according to Reuters the measure still failed by a 12-7 vote.
Unlike many car manufacturers, trade unions are very strong at the VW Group. Half of the 20 seats in the management committee are elected by workers’ councils. The other two seats are credited in part to the company’s ownership in the German state of Lower Saxony—which is currently held by the country’s education minister and president. Therefore, while profit has been important, it is not the only factor that matters to decision makers.
Over the years, there have been long debates over any proposal for layoffs. Recently, the VW Group and its unions spent several months in negotiations in 2024 before agreeing to a plan to cut 35,000 jobs by 2030.
