Volkswagen Resolves Conflict with Union... Plans to Increase Electric Vehicle Investment by 23 Trillion Won

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 9th (local time) that Volkswagen has decided to invest an additional 17 billion euros (approximately 22.62 trillion KRW) in the electric vehicle sector through a compromise with the labor union.

Volkswagen's investment in the electric vehicle sector will increase from the existing 35 billion euros to 52 billion euros. This investment scale is the largest among internal combustion engine automobile companies. Volkswagen has decided to manufacture its representative battery model, the 'ID.3,' at the Wolfsburg plant to maintain employment levels in Germany.

The conflict between CEO Herbert Diess and the labor union, which lasted for several weeks, has also been resolved for the time being.

CEO Diess emphasized the need to reduce costs to compete with electric vehicle companies like Tesla. He specifically mentioned that the workforce required would decrease with the transition to electric vehicles and stated that Volkswagen's employment could be reduced by up to 30,000 people. This caused tension with the labor union.

As a result, the strong power of the Volkswagen labor union was reaffirmed. As the conflict between CEO Diess and the union deepened, there were even predictions that CEO Diess might be replaced, but he retained his position. However, his authority was reduced.

At a press conference that day, CEO Diess said, "I was worried that we would not be able to fully commit to the transition to electric vehicles in Wolfsburg, but now I believe we can overcome it," adding, "The company and the union now share a vision for the future, and I expect the relationship to stabilize going forward."

Volkswagen announced that Ralf Brandst?tter, CEO of the Volkswagen brand, will newly join the board of directors and will lead the Volkswagen passenger car division starting January 1 next year. It was also added that Brandst?tter will take over the China business from CEO Diess starting August 1 next year.

CEO Diess is responsible for Volkswagen's software division, Cariad. Cariad is expected to play an important role in Volkswagen's transition to electric vehicles. Volkswagen plans to invest 30 billion euros in the software sector as well.

Volkswagen's major shareholder, the Porsche Piech family, stated that Volkswagen's financial condition is solid and that it can independently secure the funds necessary for the expanded investment. However, on the other hand, there is also analysis that the possibility of Volkswagen's subsidiary Porsche going public has increased. Porsche's market value is estimated to be over 100 billion euros.

This content was produced with the assistance of AI translation services.