Volkswagen to cut jobs as it expands its manufacturing lines
The European car giant recently announced that the company would need to cut a significant number of jobs as it plans its production line of electric engines that requires far less number of employees than actually required by the company.
Karlheinz Blessing, the chief of HR with Volkswagen expects the shift to electric cars might lead to a huge number of jobs being lost in the coming years. The total affected employees might reach up to a “five-digit” figure as the Frankfurter Allgemeine Zeitung newspaper reported, citing the carmaker's human resources chief.
He further added, that the carmaker will need to cut jobs in production as an assembly of electric engines requires fewer workers than making combustion engines, the newspaper said, citing an interview to be published in Saturday's edition. This move comes in light of the increasing shift in automakers towards providing electric cars to their consumers. With companies like Tesla manufacturing electrical cars that directly challenge the markets of traditional fuel dependent cars, Volkswagen seeks to diversify its production chain by focusing more on the production of electrical engines vis-à-vis vehicles with an internal fuel based combustion engine.
Moving ahead, job cuts within Volkswagen would be a by-product of the move.
"VW's works council, currently in talks with VW's brand management over a turnaround plan for the core VW brand, expects up to 25,000 staff to be cut over the next decade as older workers retire" added Livemint.
This move is also driven by the fact that an electrical engine is easier and cheaper to produce when compared to an internal combustion engine. As Wolf Richter, CEO at Wolf Street adds in his blog, “Instead of engines, engine control systems, emission control systems, cooling systems, air intake systems, starters, transmissions with clutches or torque converters, or transaxles, fuel systems, exhaust systems with catalytic converters, the computers, sensors, and regulators to tie it all together, and the like, EVs have electric motors, a battery, and some wiring and controllers to make it all work.” With a sight to get into a fast evolving space within the automobile industry, Volkswagen intends to catch up to global leaders in manufacturing electrical cars. And it’s necessary for the manufacturer to get into producing both the cars and its battery component, which is still in talks.
Blessing reaffirmed there will be no forced dismissals at Europe's largest automaker. Management and labor leaders are seeking to reach agreement on cost cuts and strategy in time for a November 18th meeting of the supervisory board to approve future spending plans. He added that Volkswagen's works council has warned that the talks with management could fail if the carmaker does not agree to invest in its own battery production.