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The crisis in the 'Volkswagen' company, a symptom of the economic decline in Germany

2024-12-07 21:45:00, Kosova & Bota CNA

The crisis in the 'Volkswagen' company, a symptom of the economic

Volkswagen is planning to make massive layoffs, prompting a strike this week by workers at the German auto manufacturing giant. As the correspondent of the Voice of America from Berlin, Ricardo Marquina announces, the crisis of the "Volkswagen" company is the next symptom of the deepening economic crisis in Germany, the most powerful economy of the European Union, which in recent years has been burdened by the high costs of energy, the war in Ukraine and competition from China.

Workers at German car giant Volkswagen walked off the job on Monday in protest at the company's proposed cuts to wages and jobs.

Analysts see this as an important indicator of the deep crisis that has gripped Germany's economy due to high energy prices caused by the war in Ukraine and the disruption of Russian gas supplies, which have been made worse by efforts by Berlin to switch to clean energy and shut down the last nuclear power plants last year.

The workers say they will continue to fight to protect their jobs.

"It is a very difficult situation: the company is calling for the closure of several factories and the mass dismissal of employees, and at the same time it wants to touch deep into the pockets of the employees", says the representative of the "IG Metall" employees' union.

The company did not respond to a VOA request for comment because of the negotiations.

Industry analysts say the shift to electric cars is an important issue as German carmakers struggle to compete with cheaper Chinese imports, even though the European Union has imposed tariffs on Chinese electric cars.

The high cost of production in Germany is another important issue.

"In Germany, we have large unions that demand a seven to ten percent increase in wages. They are not realistic. They should allow the industry to breathe," says analyst Beatrix Keim from the Center for Automotive Industry Research.

US President-elect Donald Trump's return to the White House and his threats to impose tariffs on imported cars are worrying German manufacturers.

But 'Volkswagen', along with 'Mercedes' and 'BMW', have production plants in the United States, and the companies hope that this fact will strengthen their position in negotiations with the new American administration.

"The German automobile industry is very active in the American market. With this in mind, I think that tariffs can be unproductive as a measure", says the representative of the conglomerate 'VDA', which represents the most important German car brands.

The problems at Volkswagen are just one symptom of a wider crisis that has erupted on the German political scene. The disintegration of Germany's ruling coalition has prompted the announcement of early elections in February amid tensions over the weakened economy and the results of recently held regional elections that point to the victory of the far right./ VOA