(Bloomberg) -- Volkswagen AG’s powerful works council called on management to be more forthcoming about plans to boost profits as they head into negotiations over cost-cutting measures in the coming weeks.
Council head Daniela Cavallo said the workforce is ready help achieve Chief Executive Officer Oliver Blume’s mid-term target of 6.5% margins for the carmaker’s namesake brand, but said management hasn’t provided enough detail about how to reach it.
“A simple target doesn’t bring the workforce together or spur them on to deliver top performance,” Cavallo said Tuesday during a workers assembly. “We need targets for all production sites and all major units in the brand.”
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Raising profits at the carmaker’s volume brands — VW, Skoda and Cupra — is a central task for Blume, as the company competes with Stellantis NV and a range of Chinese manufacturers to produce high-quality and less expensive electric vehicles. Reaching the additional €10 billion ($10.7 billion) in profits Blume wants by 2026 will be tough amid the fierce competition.
The cost-cutting plans have raised concerns about job security, especially as the transition to EVs alters traditional production processes. In large German companies, however, worker representatives by law sit on the supervisory board and have a strong say in strategic decisions.
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Relations between Volkswagen’s executives and its workers are often contentious, but Cavallo praised the rapport that has developed between Blume, VW brand CEO Thomas Schäfer and the works council amid the massive shift in the industry.
“Currently we are experiencing the calm before the storm,” Cavallo said. “When the storm hits, we need all hands on deck.”
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