Volkswagen CEO Oliver Blume is facing renewed resistance to his restructuring plan ahead of next week’s supervisory board meeting, with labor representatives and state government stakeholders submitting two alternative proposals, Reuters reported Tuesday, citing sources.
The news came after Blume addressed over 10,000 workers at Volkswagen's headquarters in Wolfsburg, the first stop on a tour of German plants this week to win support for a plan involving far-reaching job cuts and possible plant closures, adamantly opposed by staff but supported by the group's owner families.
The CEO gets a second shot at securing the necessary support for his cuts on Sept. 4, after failing to do so at the last supervisory board meeting in July.
This time, labor representatives and major shareholder, Lower Saxony, have drawn up alternative turnaround proposals for the automaker, three people familiar with the matter said, highlighting just how deep the conflict over the scope of Volkswagen's overhaul runs among its stakeholders.
Spokespeople for Volkswagen's supervisory board, the works council and Lower Saxony declined to comment. The contents of the proposals were not clear.
Blume has warned that Volkswagen must radically cut costs and complexity as growing competition from China, costly tariffs and a drop in demand for its cars put its traditional business model under unprecedented pressure.
He has warned that 50,000 job cuts could be necessary to keep Volkswagen competitive – roughly double the redundancy programs already agreed with unions – and initiated efforts to pare back the group's model line-up and production capacity.
"Our plan for the future is the largest transformation program in our company's history. To make this happen, everyone needs to pull together now," Blume said in Wolfsburg's packed Hall 11.
One source said his speech was met with boos from the crowd. Banners bore slogans such as "Our jobs are not your balance sheet adjustments" and "Respect is not up for negotiation," according to another source.
Speaking on behalf of the workforce, Volkswagen labor leader Daniela Cavallo said German factories were "an integral part" of the group, reiterating her opposition to closures.
"Our trust in this company's executive board, and especially in its CEO Oliver Blume, has been damaged. Not yet beyond repair, but damaged nonetheless," she said, according to excerpts of her speech shared by the works council.
"Cooperation is possible, but if VW management chooses only to pursue a path of layoffs and cutbacks, we will oppose it with all our might," IG Metall union representative Thorsten Groeger said in a statement after the meeting.
In his speech to workers, excerpts of which were shared by the company, Blume stressed that the 50,000 job cuts were based on a theoretical benchmark to bring Volkswagen's costs into line with competitors.
He also said that no decision had been taken on factory closures, which he called the "last and most expensive resort."
Blume has previously said that partnering with the defense sector or bringing production of models currently made for the Chinese market to Europe may offer preferable solutions to address overcapacity at German plants.
Management has yet to announce any breakthrough on these proposals, with automotive production set to end in its plant in Osnabrueck as early as next year.
Four other plants in Emden, Zwickau, Neckarsulm and Hanover, are lacking future prospects from 2030.
