VW wins worker support for restructuring with $1.1 billion battery plan

by SpeedLux
Volkswagen brand logo

Volkswagen workers supported a restructuring of Volkswagen on Tuesday after CEO Herbert Diess vowed to spend 1 billion euros ($1.1 billion) on a new battery cell production plant close to its headquarters in Lower Saxony.

Diess requires the support of Volkswagen’s powerful unions as he tries to slim down and simplify the German company, that has 12 brands covering trucks, buses, motorbikes, cars, and electric bicycles.

VW’s leadership has followed a strategic transition towards e-mobility, that needs less manpower to produce cars, to assist it shed the shadow of the diesel emissions test cheating scandal that harmed its finances and reputation.

Labour opposition has stifled earlier restructuring attempts at VW, that also stated it prepares to list its trucks business, integrating its MAN and Scania divisions to form a global challenger to Daimler and Volvo.

“The employee representatives on the supervisory board welcome the decisions, which they expressly support. These decisions set the course for sustainable further development of secure jobs and also profitability,” labor chief Bernd Osterloh stated in a letter to VW’s workers on Tuesday.

VW stated on Monday it would restart preparations for listing the trucks business, that is called Traton, prior the summer break, reversing a previous decision to delay the listing because of shaky markets.

It also stated it is exploring a sale of MAN Energy Solutions, that makes diesel engines for use in ships and power stations, and also a full or partial sale, joint ventures or partnerships for transmissions maker Renk.

Threats by the United States to enforce tariffs of up to 25% on Chinese imports sparked fears of a protracted international trade dispute that continues to rattle investors and has sparked a sharp sell-off on equities markets in the earlier week.

Finance Chief Frank Witter stated in a statement that “current market assessments” had encouraged the automaker to proceed with the Initial Public Offering (IPO), that could yield up to 6 billion euros if a 25 percent stake is listed.

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