Robotics and Greater Flexibility Are Expected to Save VW's Zwickau Plant

Saxony does not intend to stand idly by as the VW plant in Zwickau faces closure and is putting forward a proposal to save the company. Prime Minister Michael Kretschmer (CDU) sees an opportunity in founding AutoUnion Sachsen GmbH with Volkswagen as a shareholder and other partners.

The idea: The new company would take over the plant in Zwickau-Mosel and produce cars there at internationally competitive costs. Kretschmer ruled out Saxony taking a stake in the company. He envisions a new work model featuring self-managed teams and flat hierarchies. Employees are to share in the company’s success, and an “innovative collective bargaining agreement” is intended to guarantee international competitiveness. 

Pilot project for humanoid robots

At the same time, Saxony—in cooperation with the federal government—is recommending the Zwickau plant as the location for a “Humanoid Robotics” cluster of excellence, which is intended to make the project attractive to other companies as well. Zwickau could thus become a pioneer in the use and development of humanoid robots, officials said. The robots are to be “trained” at AutoUnion.

Kretschmer: Taking Our Fate Into Our Own Hands

“We must take our fate into our own hands. Volkswagen is so important, and the automotive industry is so important, that we cannot allow ourselves to become dependent on others,” Kretschmer said in explaining his initiative, calling for “give and take” and “fair cooperation.” A great deal of trust has already been destroyed.

Production in Zwickau is scheduled to wind down in 2031

“Volkswagen said, ‘We’ll make you the leader in electric mobility, and then you’ll be secure for all time. The opposite is true,” the state premier recalled, referring to earlier statements by the company’s top management. In light of overcapacity and growing competition from China, the executive board plans to cut an additional 50,000 jobs worldwide on top of existing layoff plans. According to current plans, production in Zwickau is set to end in 2031.

Production costs must come down

“We need our own company that’s free from these difficult collective bargaining agreements. We’ll only be successful if production costs are on par with those in Eastern Europe,” said Kretschmer. He added that everything that contributes to greater competitiveness must be put on the table—without wages falling excessively. “Of course, people in Saxony will continue to earn more than those in Eastern Europe in the future.” Ultimately, this is a matter for the collective bargaining partners.

“Time is of the essence; time is working against Zwickau, but in favor of other locations in Germany, and that’s why we must get to the negotiating table in the coming weeks,” said the Minister President. He expects the VW Executive Board to sit down and see what’s possible. At the moment, he’s sensing a lot of mistrust.

Kretschmer laments stalemate in talks about VW’s future

“Everyone is staying in their trenches. There are no real discussions. This means that week after week goes by. And time is running out for Zwickau, for Saxony, and for the 8,000 employees we have there. And that’s why we’re now taking the initiative with this proposal,” Kretschmer emphasized. 

The name AutoUnion stands for a successful automotive history

Kretschmer first proposed the idea of a new AutoUnion in September in the state parliament. In doing so, he alluded to the glorious days of Saxony’s automotive history. Auto Union AG was a company formed in 1932 through the merger of the four brands Audi, DKW, Horch, and Wanderer, with its headquarters in Chemnitz. However, Kretschmer intends the name AutoUnion to be more of a working title.