By Victoria Waldersee
Volkswagen management is set to meet a fearful workforce at its headquarters on Wednesday as it unveils plans for painful cuts, including possible factory closures in Germany, in a bid to reach an ambitious profit target for its namesake brand.
Chief Financial Officer Arno Antlitz and VW brand chief Thomas Schaefer will present the automaker's plans at the meeting in Wolfsburg, Germany, known for housing the massive Volkswagen plant.
Works council head Daniela Cavallo, representing the workers, has expressed strong opposition to the proposed cuts, warning of high emotions and discomfort for management during the meeting, which is expected to be lengthy.
Volkswagen announced its consideration of closing factories in Germany and ending a long-standing job guarantee at six plants as part of a 10 billion euro cost-cutting initiative. The company aims to achieve a 6.5% profit margin by 2026, a significant increase from the current 2.3%.
Unions and Volkswagen management are scheduled to negotiate a wage increase in October, but labour representatives are pushing for earlier discussions to address the carmaker's options.
Analysts believe that Volkswagen must make quick decisions on cost reductions, given its financial challenges and the evolving market landscape.
Jefferies analyst Philippe Houchois emphasized the need for consensus between management and unions in tough times, but acknowledged that reaching an agreement would not be easy.
This meeting is crucial for Volkswagen's future direction and could have significant implications for its workforce and profitability.
