Job cuts at Volkswagen's Zwickau plant due to low demand for electric cars

In view of sluggish demand for electric cars, Volkswagen is threatening to cut jobs at its Zwickau plant. According to dpa information, there is talk of not extending employees' temporary contracts. Initially, this could affect a few hundred of the total of around 10,700 employees at the Saxon site at the end of October. More than 2,000 people currently work there on fixed-term contracts. Depending on the further market situation, they could now face the end of their jobs at VW for the foreseeable future. On Thursday, a works meeting is planned.

"It is a serious situation," said Saxony's Minister of Economic Affairs Martin Dulig (SPD) on Wednesday when asked. He said he has been in contact with the works council and his Lower Saxony counterpart Olaf Lies (SPD) for several weeks. He conceded that there were currently problems on the sales markets. This trend must not be allowed to intensify, he said. He said it was necessary to look for ways to bring prospective buyers more strongly to German suppliers. One idea, he said, was a leasing initiative by Saxon companies. Dulig: "But VW itself is also asked to submit proposals on how the sales situation can be improved and stabilized."

For weeks now, uncertainty has been growing at the e-car factory in the face of sluggish demand. Many employees are expressing concern. Now shop stewards from IG Metall have addressed the management with a letter. "Enough is enough! We finally want answers," the newspaper Freie Presse quoted from the letter on Wednesday. Questions are loud about why the E-cars are not better advertised and whether the plant remains a 3-shift location.

Alarm bells are also ringing in the state government. "In the next few days, perhaps hours, we will hear unfortunate news," said Prime Minister Michael Kretschmer (CDU) at a CDU regional conference on Tuesday evening, according to "Leipziger Volkszeitung". Meanwhile, the AfD gave the state government a share of the blame for the misery, spoke of an "E-car aberration" and urged technology openness, "to save thousands of jobs."

VW has converted its plant in Zwickau in recent years for 1.2 billion euros to a pure factory for electric vehicles. The last combustion engine ran there 2020 from the volume. In addition to ID models, vehicles of the Audi and Cupra brands are also produced. Last year, 218,000 e-cars were built, according to earlier figures. This year, production was supposed to increase - up to 360,000 vehicles would be possible at full capacity. Instead, it could now come to the reduction of shifts.

However, in view of high inflation and declining subsidies, car buyers are now reluctant to buy electric cars. Industry experts, for example, expect the market share of e-cars in new registrations in Germany to fall sharply in the coming year. On average, e-cars are significantly more expensive than combustion engines. In addition, the government purchase premium for commercial customers was abolished on September 1, and for private customers it will drop from a maximum of 6750 to 4500 euros at the turn of the year. In addition, there is growing competition for German manufacturers on international markets in this sector: not only by Tesla, but also Chinese manufacturers such as BYD.