Volkswagen’s works council demands clarity on VW brand turnaround plan

BERLIN (Reuters) – Volkswagen’s works council is demanding more information on a cost-cutting and efficiency drive being drawn up for the automaker’s main passenger car brand, saying employees needed more transparency from management on its plans.

The German group said in June its VW passenger car brand was planning to make 10 billion euros ($10.7 billion) of savings and cost cuts by 2026 to help meet a return-on-sales target of 6.5%.

Programme milestones were to be developed and adopted in consultation with employee representatives by October, Volkswagen said – but so far, no further targets have been set beyond the 6.5% margin, according to a statement by works council chief Daniela Cavallo at a workers meeting at the Wolfsburg plant on Tuesday.

Employee representatives were only chosen last week, Cavallo said – with little time left to meet the October deadline.

“I call on the board to develop clear targets … for all locations and all large entities within the brand,” she said.

The Volkswagen Group is in the midst of a strategy shift aimed at proving to investors it can protect market share in the transition to electrification, particularly at its mass-market brands.

The automaker cut its sales target in July and said performance programmes must begin yielding results this year to cope with rising competition.

Speaking to workers on Tuesday, Volkswagen brand chief Thomas Schaefer said a fully-fledged package would be ready in the autumn and presented to the works council in coming weeks, adding many employees had already made good suggestions.

Schaefer was reported to have warned workers from around the globe in a virtual meeting in July that the VW brand’s “roof was on fire” amid slower-than-expected electric vehicle demand, subdued consumer confidence, and rising competition, deeming it “the last wake-up call”.

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(Reporting by Victoria Waldersee; Editing by Mark Potter)