Workers Threaten Strikes Amid Fall in Profits

Volkswagen is facing a critical juncture as third-quarter profits fell by almost 50 percent and revenue fell 6 percent to 145.4 billion euros. The automotive giant’s profit margin decreased to 3.6 percent, ranking twelfth among global automotive manufacturers. This financial crisis is especially evident in the Chinese market, where vehicle sales fell by 17 percent. In addition to these difficulties, the IG Metall union announced comprehensive warning strikes at all Volkswagen plants in response to the company’s extensive cost-cutting proposals, including possible 10 percent wage reductions.

Restructuring Plans Under Union Pressure

The automaker’s restructuring strategy identified the potential closure of at least three facilities, affecting thousands of jobs. This decision is due to a production shortfall of approximately 500,000 vehicles required for optimal use of the facility. While plants in Dresden and Osnabrück face particular scrutiny, the IG Metall union has proposed an alternative cost-cutting plan targeting savings of €1.5 billion. Simultaneously, Volkswagen increased its research and development investment by 12 percent to 8.3 billion Euros, aiming to maintain its technological competitiveness in the face of increasing pressure from Chinese competitors and slowing electric vehicle demand.

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