Volkswagen's plans to cut jobs and close a plant in Germany have caused an outcry. The move is unprecedented in VW's 87-year history, but its CEO says this is necessary due to the "highly challenging situation."
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00:00Frustration and anger marked the start of a meeting, where Volkswagen management laid
00:06out its plans to scrap a job security agreement the company has had with its workers for 30
00:13years.
00:14The mood was very divided.
00:16There's a large division between the works council and the board.
00:19I've never seen it this bad.
00:21Whenever the works council speaks, they cheer, and when the board speaks, there's booing.
00:28People express themselves very clearly.
00:30They have fears about the future.
00:33The works council had some strong words to express what exactly the fears of the workers
00:37are.
00:38There are people here who are worried about being fired.
00:42The job guarantee was supposed to last until 2029, with the leader of the Volkswagen's
00:48workers council saying they're now gearing up for a fight.
00:55It's not just a matter of holding on to locations, whatever the cost, and then realizing in
01:00the next few years that this will catch up with us again.
01:03But we must also ensure that our company is profitable.
01:07And it has always been the case in the past that labor costs in Germany are higher than
01:11in any other country that we produce.
01:13This is nothing new.
01:19The automotive sector is the most important economic engine here in Germany.
01:23That's the message of works council head Daniela Cavallo at the meeting today.
01:28She says that if Volkswagen begins cutting back jobs, entire communities will feel it.
01:34CEO Oliver Blume has defended the move, explaining that the new competitors in Europe and a challenging
01:42economic environment are putting pressure on the company's finances.
01:48Volkswagen's share price has fallen by nearly a third in five years, increasing pressure
01:53on Blume to cut costs.
01:56With the growing threat of cheaper Chinese brands already eating into Volkswagen's market
02:01share, a strategic rethink is needed.
02:04They are losing sales.
02:06They are right now losing sales.
02:08And even for the electric cars they are producing in China, there is a very, very hot price
02:16competition going on, let's call it a price war.
02:19So Volkswagen needs to adjust on pricing here as well.
02:23That means losing money.
02:25Despite the risks to the company, workers here worry that a line has been crossed and
02:30that they could pay for the failure of management to keep up with competition abroad.