The Volkswagen group will halve car models and lower production by 25%

BarcelonaThe German automotive group Volkswagen reported this Thursday that it will reduce its production capacities by 25% to 9 million vehicles annually to adapt them to the global market situation and increased competition. The company, which has an installed capacity of 12 million vehicles, will also gradually reduce the supply of its car models by up to 50%, concentrating on the most attractive market segments. Currently, the group is configured with around 150 models, across all brands.

However, the group's supervisory board, as reported by the German newspaper Frankfurter Allgemeine Zeitung, has not reached an agreement on the most critical issue: the plan of Seat's parent company, which, as reported by the German media Manager Magazin, involves cutting up to 100,000 jobs globally in the next five years.

Although it is not known where or how the job losses will be distributed, the task of approving the roadmap is expected to be complicated: of the 20 members of the supervisory board, 10 are elected by shareholders, while the rest are chosen by employees. Furthermore, it should be noted that two of the seats on the shareholder bloc are held by the government of Lower Saxony (the region where Wolfsburg is located) and, therefore, do not have a strictly business-oriented position. In fact, according to various reports, two of the four plants planned to be closed in Germany would be located in Hanover and Emden, cities in this German state. The other two German factories rumored to be closed are those in Neckarsulm and Zwickau.

Concern in Martorell

According to the same information, however, the effects will not be limited to Germany and, as sources close to the company point out, among Seat workers there is concern about ending up being one of the affected subsidiaries. In fact, the situation has once again raised the specter of a possible disappearance of the brand. In recent years, the group's efforts have focused on the development of Cupra, and the historic Catalan firm has been relegated to the background: Seat has not presented a new model for more than seven years and currently its range of vehicles is limited to three, the Ibiza, the León and the Arona, after the Ateca, Alhambra, Tarraco and Mii have ceased to be manufactured.

Union sources hold the German parent company responsible for this "neglect", which they consider has not "boosted" Seat enough in recent years, and assure that the problems that the group currently has to overcome are not precisely the result of the work done in the Iberian Peninsula. Furthermore, they detail that the progressive cutback of jobs in the Martorell offices – where about 1,300 workers have been lost in recent years through early retirement plans and non-replaced departures – has already left the company's structure at a minimum.

Company vs. plant

Martorell is Seat's headquarters, and that means it's much more than just a factory. Thanks to it, Seat gains decision-making capacity within the group and, therefore, achieves a certain independence from Germany. This position, for example, differentiates it from the group's factory in Pamplona, which, despite being a plant, lacks company structure. Furthermore, it's worth noting that, as a factory, Martorell also holds vital importance within the group, as it is one of the three largest production sites for Volkswagen in Europe.

"We are worried about what might happen," sources within the company tell ARA, assuring that if the impacts end without a reduction in staff, they will likely translate into fewer investments. This, precisely, is what, according to their indications, neither Seat nor Cupra, Martorell's other own brand, can afford at the moment, as they need "confidence" to "renew themselves" and to "get started," respectively.

Moreover, in recent times, another of the staff's main demands has been to unblock the assignment of a second platform that would allow the factory to produce a large-segment electric car. This request is considered a strategic element for the factory's future. As Volkswagen's CEO, Oliver Blume, explained in a meeting with journalists after the launch of electric car production in Martorell, it is expected to be resolved in the coming months.

However, union sources express their concern to ARA that the restructuring process might halt the assignment. The situation, as they explain, is that due to the closure of four factories in Germany, the German part of the supervisory board might demand that the vehicles manufactured in the affected factories remain in their country and that a significant volume of future investments also be located there.