The crisis at Volkswagen: Employees fear the layoff of another 50,000 people

Closing production plants and mass layoffs of tens of thousands of employees — Volkswagen, the company that was once the desire of every German worker, where every junior employee would earn and receive conditions that managers in other companies would dream of, is beginning to sweat out the severe crisis in the German automotive industry. Employees and management are entering the arena without gloves.

"It is impossible to work with a CEO who does not tell his employees what the situation really is," said Daniela Cavallo, head of the company's works council, about Oliver Blume, CEO of the Volkswagen Group, to the applause of thousands of employees. This comes after sources at the company's headquarters in Wolfsburg leaked that Blume intends to fire another 50,000 employees (bringing the total number of layoffs to 100,000), with at least half of them being employees in Germany. "This is not our goal, but a theoretical calculation," said Blume, a statement that did not really reassure the employees.

Employees generally claim that the main blame for Volkswagen's situation lies in the conduct and lack of vision of the management, which failed to move Volkswagen to the next phase, especially in the electric vehicle division. There is also a lack of transparency regarding the steps to cut expenses. "There is a blatant use of our labor and our status as employees to try and improve the company's annual balance sheet," a worker in Wolfsburg told the German news agency.

In an internal video interview, Blume stated:

"The situation is more than critical. Our trust in the management and the chairman has been damaged."

It seems that there is an abyss between the managers' awareness of the company's situation and the employees' awareness. A manager at the company told "Die Zeit": "It is clear that drastic measures are needed here to save the company, including mass layoffs and factory closures. The employees do not understand the severity of the situation. They still treat this great crisis as something romantic that can be solved in ordinary ways."

Cavallo claims: "Historically, Volkswagen is not a corporation that operates solely according to the rules of the capitalist market. The company also belongs to us, the employees. What is happening here is simply an attack on the employees. Instead of showing us the light at the end of the tunnel, the management is simply pointing to show us the lights of the train that is advancing at top speed towards us."

Volkswagen's savings plan involves closing factories, reducing more than 2,000 subsidies, lowering production costs, reducing unprofitable car lines, freezing recruitment, and encouraging early retirement. The German automotive sector has been suffering from global crises, such as the wars in Ukraine and Iran affecting energy prices, US tariff policies, and mainly developments in the Chinese automotive market, where German cars are losing ground and China is leading in electric vehicles.

The first part of the layoffs (50,000 employees, of which 35,000 are Volkswagen employees and the others from Audi and Porsche) has already begun; 37,000 employees have already signed agreements. The leaders of the state of Lower Saxony, which holds the second largest number of shares, oppose factory closures and suggest repurposing facilities, for example, for defense production.

Four years ago, when Blume took office, there were high hopes. He grew up near the headquarters, his father had a supermarket on Porsche Street, and his first car was a Beetle. However, he took the helm when the Volkswagen ship had already hit an iceberg. Since he took office, stock has lost half its value, profits have been falling for ten consecutive quarters, and the company's football team was relegated to the second league. Blume is trying to save a flagship of the German economy, but employees cannot understand how drastic the situation is. This will not end well.