Future of VW’s German plants hangs in balance with talks set to start

Company executives and labour leaders are set to discuss recovery plans in response to the fallout from the huge disel-rigging scandal last year.

Workers conduct final inspection of finished Volkswagen cars at the VW Wolfsburg factory in Germany. Negotiations are to stat next week on the future of the car maker's domestic plants. Sean Gallup/GeShow more

Volkswagen said its executives and labour bosses will begin talks next week on the future of the car maker's German plants as they seek to recover from a costly diesel emissions scandal.

Industrial relations at Volkswagen's core VW brand hit a low in April when the works council boss Bernd Osterloh accused the VW chief Herbert Diess of betraying workers and trying to use "Dieselgate" as a pretext for job cuts.

But two weeks after Volkswagen and the IG Metall union struck a pay deal for the firm’s 120,000 workers in western Germany, top managers and labour leaders on Tuesday signalled further rapprochement at a critical time for Europe’s biggest car maker.

After a gathering of more than 20,000 workers at the main Wolfsburg plant, Volkswagen’s brand management and works council issued a joint statement saying they had “reached a common understanding about the starting situation and the challenges” created by the emissions crisis.

Pressure has mounted to make cuts at Volkswagen’s core operations in Germany since the revelations almost nine months ago that the company had fitted some of its models with “cheat” devices which enabled them to pass emissions tests.

The scandal has led to US regulatory bodies seeking billions in damages and fines from the German company.

“We must raise productivity and profitability and cut costs,” the VW human resources chief Karlheinz Blessing said. “Then, VW can and will remain a strong engine for employment.”

“This [rebuilding of VW] requires a huge effort from the company and its workforces,” Mr Osterloh said. “VW will only be able to offer safe jobs over the long term if we now take bold decisions.”

Volkswagen plunged to a record loss last year after setting aside €16.2 billion (Dh67.55bn) to cover the costs of the emissions scandal, but still faces potential US justice department fines and questions over who was responsible.

Next week it will present a new business plan aimed at improving accountability and decentralising product planning and sales operations, with greater investment in electric cars and mobility services.

Bilateral talks on the future of VW’s German factories, which labour wants to set fixed targets and quotas for products, output and investments, should be concluded by the autumn, VW said.

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