In the midst of Volkswagen’s crisis, Federal Minister of Economics Robert Habeck is visiting the VW plant in Emden today. The visit is part of a company tour by the Green politician. In view of the crisis in the industry, Habeck is inviting people to an “auto summit” next Monday. According to the ministry, representatives of the largest automobile manufacturers and suppliers are taking part, along with the industry association VDA and the union IG Metall.
VW is struggling with high costs in its core brand VW Passenger Cars. The carmaker has terminated the job security agreement it has had with the unions in Germany for decades, and factory closures and redundancies are under discussion.
According to a report by “Manager Magazin,” the troubled company could cut up to 30,000 jobs in Germany in the medium term. The company did not confirm the figure. The general works council stated: “This figure has no basis whatsoever and is simply nonsense.”
Crisis in the industry
German manufacturers are struggling with weak sales figures and high costs for switching to electric drives. This is causing profits to melt away. Volkswagen reported a 14 percent drop in profits in the first half of the year, BMW’s profits fell by almost 15 percent, and Mercedes-Benz’s by almost 16 percent. The crisis has also reached automotive suppliers. At the same time, new competitors such as Tesla and manufacturers from China have entered the market.
E-car sales collapse
After the abrupt halt to state funding at the end of last year, sales of electric cars collapsed. The federal government justified the halt with budgetary constraints. The government is now planning stronger tax incentives for electric cars as company cars. The cabinet had put planned measures in motion.
VW plant in Emden is of great importance for the region
Around 8,000 people work at Volkswagen in Emden. The VW site is the most important industrial employer in the region. For the group, the plant in East Frisia, where cars have been built for 60 years, is an important location for the construction of electric cars.
In recent years, VW has converted the factory into a plant exclusively for electric car production while it was still in operation – as the first plant in Lower Saxony and the second location in Germany after Zwickau. The group says it has invested more than one billion euros in Emden since 2020 for new production capacities.
Construction of electric cars
Last summer, VW began series production of the ID.7 electric sedan in Emden. The smaller ID.4 SUV has been built in Emden since May 2022. Not least, the cancellation of the purchase premium for electric cars in Germany at the end of 2023 had caused demand to collapse. The Emden car factory has therefore also not been operating at full capacity recently.
© dpa-infocom, dpa:240920-930-237780/1
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