Volkswagen is in dire straits

Car manufacturer Volkswagen is in dire straits. This is underlined by the figures for the third quarter of 2024, which the group recently announced.

Operating income plummeted by 41.7% to €2.8 billion compared to the third quarter in 2023, and actually by 63.7% after tax. The Volkswagen Group is struggling with declining sales in China and Europe. In the Chinese market, Volkswagen is losing the battle with Chinese electric cars. Over the whole of 2024, the group – whose brands include Volkswagen, Porsche, Audi, Skoda and Seat – expects sales to fall by €2.3 billion to €320 billion.

The figures are forcing the company to take substantial action, the management announced. In order to preserve jobs and remain competitive, the company is asking its employees to take a 10% wage cut. Subsequently, in 2025 and 2026, salaries will be frozen and bonuses will be forfeited. This is at odds with the financial demands submitted by the German trade unions, who are asking for a 7% wage increase.

Closure of three factories

Additionally, the Volkswagen Group wants to make substantial savings which, according to the works council, will lead to the loss of tens of thousands of jobs and the possible closure of three factories. The unions are considering taking action if the Volkswagen management does not show ‘a real desire to negotiate a viable future concept for all plants’. Nearly 300,000 people work at the 10 Volkswagen plants in Germany. The wage cut that Volkswagen is now proposing would affect a large number of the employees.