Chip shortage keeps VW under pressure

Created: 02/16/2022, 14:32

VW works council chief Daniela Cavallo at the digital works meeting in Wolfsburg.

© Kevin Nobs/VW Works Council/dpa

When analyzing the causes of the production backlog, the VW works council does not shy away from criticizing the management.

CEO Diess sees the headquarters on a stable course in the medium term.

Wolfsburg - The global chip crisis could slow down Volkswagen, especially at the main plant in Wolfsburg.

The group management sees progress in the drastically reduced supply of semiconductors.

However, the absence of night shifts and production prospects far below the original plans are worrying the works council, as became clear at a digital meeting on Wednesday.

After fierce internal debates, both sides consider the VW headquarters to be well prepared overall in order to be able to take a more offensive approach to competition, especially from Tesla, in the coming years.

On the way there, however, there are still a few points to be clarified.

It seems to have been decided in advance that the new factory for the future central Trinity electric model should be built as directly as possible on the premises of the Heimatwerk.

Works council chief Daniela Cavallo was nevertheless concerned.

Beyond the pandemic, last year “raised many questions and caused uncertainty,” she said, according to the speech transcript.

"Unfortunately also for worries and fears." Cavallo estimates: "The coming months will be tough, they will demand a lot from us, they require all our strength for our company and our jobs."

The insufficient supply of electronics meant that around 330,000 cars could not have been built in Wolfsburg in 2021.

The fewer than 400,000 cars still produced mean a number of units last seen in 1958. Most of the night shifts are to be canceled here soon.

Meanwhile, employees cannot be held responsible for failures in semiconductor procurement, Cavallo said.

You would be entitled to compensation for the surcharges that are no longer applicable.

The Wolfsburg production target for 2022 of 570,000 cars - even without considering the lack of chips - is not a good signal.

"That corresponds neither to what we have agreed nor to what this plant can achieve," said the head of the works council, who also sits on the presidium of the VW supervisory board.

“On the one hand, the group is at a record level.

But on the other hand, and at the same time, Volkswagen and our Wolfsburg headquarters are in a serious crisis.”

CEO Herbert Diess said: “Wolfsburg is particularly hard hit by the semiconductor situation.

That is why capacity adjustments are necessary, also in the medium term.” He emphasized that the problem is now better under control: “The semiconductors are the only major challenge, which is also the greatest concern for Wolfsburg.

We made progress here over the turn of the year.”

A task force has long been concerned with securing chip inventories for VW.

Temporarily, other technical solutions were also found to replace missing microprocessors, Diess reported.

“Even in 2022 we will not be able to build all the cars that we could sell.

But we see opportunities for further increases in production, especially in the second half of the year.”

Cavallo emphasized that the uncertainty remains high for the time being.

At the turn of the year, many temporary workers had to leave.

"As bitter as that is: In the meantime, we are dealing with employment for our core workforce," she said about the shift schedules.

The order situation is very good.

Without the existing job security until 2029, you would have to have completely different job debates.

"They bear the main responsibility for our situation, and that's why we don't allow the consequences to be carried out solely on the backs of the employees," Cavallo said in the direction of management.

The shortened night operations in Wolfsburg could affect 5,000 people.

The headquarters are particularly struggling with a lack of parts - also because VW has concentrated the available chips heavily on the ID series and profitable luxury class models.

From 2023 and in full production in 2024, the ID.3 should then also come to Wolfsburg.

Construction of the Campus Sandkamp development center should start by the end of the year, and by spring 2023 at the latest for the Trinity factory.

The e-model, which will be launched in 2026, should be able to drive semi-autonomously.

"We need the project above all for the transformation at the headquarters, i.e. to continue to provide work for the employees we now have on board," Cavallo told the German Press Agency.

"It definitely has to take place here" - i.e. on the current site or at least in the immediate vicinity.

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VW HR Director Gunnar Kilian made it clear in the dpa interview: "In the end, the criterion of profitability will always be decisive when choosing the location." However, there are many points that speak in favor of locating in the immediate vicinity of the headquarters.

"In this way, we don't burden the production start-ups of new cars at the main plant with extensive conversion work and can at the same time convert it according to the model of the new factory." The Tesla factories are considered to be a model.

A final decision on the site is expected later this quarter.

dpa