VW Crisis: Four countries demand preservation of the sites - and the comeback of the E-subsidy

Four federal states with VW locations – Lower Saxony, Saxony, Hesse, and Berlin – want to work together to ensure that the struggling car manufacturer does not close any sites. The comprehensive maintenance of all locations is the primary goal of the economic ministers of these states, according to a joint position paper. "This means that individual locations should not be played off against each other." Several media outlets reported on the paper dated October 10.

The state ministers also reject "hard cuts" at the expense of the employees. In the long term, a renewed, lasting contract for employment security must ensure that jobs are protected and expertise is retained, they demand.

"Once lost, expertise is generally lost forever or can only be restored with great effort," warn Olaf Lies (Lower Saxony), Martin Dulig (Saxony), Kaweh Mansoori (Hesse), and Franziska Giffey (Berlin). All four department heads belong to the SPD.

The Volkswagen brand employs about 120,000 people in Germany, over 100,000 of them in Lower Saxony. The state of Lower Saxony also holds 20 percent of the voting rights in the VW Group. Volkswagen has terminated the employment security agreement with unions in Germany that has been in place for decades. Plant closures and compulsory redundancies are under discussion. There is fierce resistance to this from the works council and IG Metall.

New Government Incentives Aimed at Boosting Demand

The sudden discontinuation of the electric car subsidy last year caused a collapse in demand for battery cars in Germany. For manufacturers, this means their factories are underutilized and, due to the stricter EU fleet targets for CO2 emissions from 2025 onward, they face the threat of high fines in Europe. Therefore, the economic ministers of the four states are also advocating for new purchase incentives meant to give the German automotive industry a boost. Specifically, there is talk of a sales promotion program "that primarily benefits the domestic automotive industry while simultaneously eliminating windfall effects and social injustices." 

"The cessation of the purchase premium for electric cars was wrong and, in a situation where many people are already questioning their consumer behavior, it led to even more restraint," criticized Lower Saxony's Minister Lies. The federal government should therefore quickly reintroduce the environmental bonus. "Purchase incentives were and remain of great importance to stimulate the spread of electric cars and thus boost production."