Volkswagen readying for talks over manufacturing crisis “at home”

Volkswagen managers and workers representatives will start crunch talks in Hanover on Wednesday, following the German group’s announcement that drastic cost-cutting measures are needed to keep the carmaker competitive.

Two homegrown figures who have spent their entire careers at Volkswagen – group CEO Oliver Blume and head of the works council Daniela Cavallo – will face off at the meeting.

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Blume wants to seal a “package” of measures this year to shore up the carmaker, which has struggled with weak demand and a difficult transition to electric vehicles.

Cavallo has promised “bitter resistance” to the plans that include the possible closure of production sites in Germany; an unprecedented step in the 87-year history of Volkswagen.

The boss

A mechanical engineer by training, Blume plotted his career through the different brands – Audi, Seat and then Volkswagen – before becoming CEO of Porsche in 2015.

The mild-mannered manager was tapped by the family dynasty behind Volkswagen to become head of the group in 2022, replacing controversial figure Herbert Diess.

A consensus-builder by reputation, Blume was seen as a breath of fresh air after Diess had rubbed shareholders and unions the wrong way with provocative statements.

So it was all the more surprising when Volkswagen announced this month that it could cut thousands of jobs by closing factories in Germany.

The shock proposal alarmed unions and the government but Blume has said drastic action was necessary to take on the “major challenges” faced by the carmaker.

In his short time as CEO, Blume has already sought to cure Volkswagen’s ills, scrapping Diess’s policy of doing everything in-house and striking new partnerships.

The German giant has made investments in Chinese manufacturer XPeng and US outfit Rivian to work on in-car technology, although the new projects will take time to pay off.

The union leader

Like Blume, Cavallo was born close to Volkswagen’s headquarters in Wolfsburg and has never strayed far from the group.

Her father emigrated to Wolfsburg from Italy to take up a job at Volkswagen along with thousands of other so-called guest workers.

Cavallo, the first woman to lead Volkswagen’s works council, began an apprenticeship at the carmaker out of high school.

In 2002, she was elected to represent workers at the Volkswagen subsidiary Auto 5000, working her way up to the head of the general works council in 2021.

“My job is not to understand technology down to the last detail, but to advocate for people’s interests,” Cavallo told Die Zeit newspaper after being criticised for not having spent sufficient time on the factory line.

Cavallo is “very clear on what she wants for employees”, said car market expert Stefan Bratzel, who warned that management should not “underestimate” her.

She reportedly gets along with Blume better than she did with Diess.

There was a slim chance that the two Volkswagen lifers could figure something out “in partnership”, said Bratzel.

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