00:00Pretty bombshell revelations, I think it has to be said.
00:03These warnings are coming from a representative called Daniela Cavallo.
00:07Now, she is effectively the Labor Chief of what is known as the Works Council,
00:12representing workers.
00:13And we know that that council has been locked in talks with Volkswagen's Board of Management
00:19for the past couple of months, following that news in September
00:22that they were looking at making some cuts to their costs.
00:26And what she is saying today is that from those talks,
00:29the employers' union has garnered the knowledge that three factories are planning to be closed
00:35and some of the 300,000 workers that make up the Volkswagen Group here in Germany
00:40could lose their jobs.
00:42She's also saying that Volkswagen overall is looking to reduce its factory footprint within Europe.
00:49Now, the company itself responding to this has given a statement,
00:53saying that indeed cost-cutting measures are being looked at.
00:57But they wouldn't comment on the specifics of what the employers' union is saying.
01:02But what they are saying is that come Wednesday, we will learn some more detail
01:07because that is when the board is due to sit down again with that works council
01:11to discuss some of those measures.
01:13But already some Volkswagen board members have been out in the German media today
01:18saying that right now their cost for making a car in Germany
01:21are around 25 to 50 percent higher than they need to be.
01:25And they say they just simply cannot make money the way things are right now,
01:29which is why some serious discussions need to be had
01:32about where this company can find some savings.
01:35Yeah, and Trent, the coalition government then is appealing for jobs to be safeguarded.
01:40Why is this such a big issue in Germany?
01:44Well, look, I think really when you think about
01:48sort of Germany's famous industrial complex
01:52when it comes to the automotive sector,
01:54you really only think of Volkswagen in many ways.
01:57It is one of the crown jewels.
01:58So for Germans seeing this news tonight on their evening bulletins
02:02that one of the country's most famous companies
02:04is now embarking on this big cost-saving measure,
02:07tens of thousands of potential jobs, factories being closed,
02:10it will be a big shock for people both politically and economically.
02:15We know Chancellor Schultz, of course, is monitoring all of this quite closely.
02:18It will be news he certainly will not welcome preparing to go into an election year.
02:22His spokesperson saying earlier today that the Chancellor's priority
02:26is to try and secure jobs.
02:29But it really has been a bumpy road for the auto sector in recent months.
02:33We've seen Porsche and Mercedes-Benz in the past week
02:36announce their own cost-savings measures,
02:39particularly because of some weakening demand within China
02:42amidst stiff competition from some Chinese brands like NIO and BYD.
02:47So, look, a bumpy road ahead, really, I think, for the German auto sector.
02:50And we will learn more later this week
02:52when the Volkswagen board sits down with those employers' groups
02:55to discuss what they'll do next.
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