Volkswagen safeguarding 22,000 jobs at Wolfsburg plant

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Volkswagen’s output of the updated ID 3 hatchback will hit full volumes by mid-2024; SUV arriving by 2026, as it looks to retrain over 20,000 staff.

Volkswagen has announced it will retrain 22,000 workers at its Wolfsburg plant by 2025, preparing them for the addition of electric vehicles to the factory’s production line.

By mid-2023, around 1200 employees will have been trained to build the heavily updated Volkswagen ID 3 electric hatchback, ahead of production beginning in autumn. This will initially be in limited capacity – referred to as “subassembly” in an official Volkswagen statement – before escalating to “substantial numbers” in 2024.

Wolfsburg will also host production of a new electric SUV (also based on the ID 3’s MEB platform) “in the near future”, said the statement.

Volkswagen brand CEO Thomas Schäfer had signed off development of an ID 3-based crossover to give the firm another product in the “fast-growing” small SUV segment. This will arrive before 2026 and will look dramatically different to the ID 3 hatchback – rather than taking on ‘Russian-doll’ styling.

In total, the company will launch 10 electric cars by 2026 (including facelifts of current models).

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Speaking about the plant’s expansion, its manager Rainer Fessel said: “The new production line in Wolfsburg will give us more flexibility than ever before.

“The assembly line will be the first at one of the Volkswagen brand’s passenger car plants in Germany that is able to build both MEB [EV] and ICE vehicles on the same line. With the future SSP platform, this will make Wolfsburg Volkswagen’s first multi-platform factory a few years from now.

“That will give the main plant a major advantage in terms of capacity utilisation over the next 10 years. It is how we are safeguarding jobs at the Wolfsburg plant and giving our workforce a clear perspective for the future.”

The SSP platform refers to the Volkswagen Trinity project, which will spawn the first mainstream model based on the architecture. It was originally planned to be produced at a new facility on the Wolfsburg grounds, but – having been delayed by two to three years under new brand head Schäfer – it may now be tacked onto the plant’s main assembly line.

The Volkswagen Group board recently met to decide the fate of the Wolfsburg extension, reported German trade newspaper Handelsblatt. In response to the report, Volkswagen said it will speed up its shift to electric cars – reorganising its production network in turn – and that more details will be presented at the company’s annual conference on 14 March 2023.

Christian Vollmer, Volkswagen brand board member for production and logistics, said: “Wolfsburg is special in that ICE vehicles will also still be built here for many years to come. In other words: for Wolfsburg, the upcoming transformation is first and foremost about integration – interfacing smoothly with ongoing operations and with production. That is a very special challenge.”

Maintaining ICE production at Wolfsburg is likely to be key to protecting jobs at the plant. Several influential figures in the automotive industry, including Stellantis CEO Carlos Tavares, have warned that electrification threatens the future of many factories.

Hinting at the prospect of plant closures to cut costs, Tavares said in January: “Anywhere you introduce technology that is 40 per cent more expensive than the previous one you need to work hard in improving your business model through fixed and variable costs.

“If the average transaction price increases because of the EV sales mix increase, then you have [the] risk that the total market shrinks.”

Ford last week announced 3800 job cuts across Europe in pursuit of a “leaner and more cost-competitive structure”, according to Europe boss Martin Sander.

Sander added that the job cuts were primarily due to the “drastically reduced complexity of [electric] powertrains”.

A production line for the ICE-powered, refreshed Volkswagen Tiguan will also be added to Wolfsburg in the coming months, said Volkswagen. It is investing €460 million (AUD$714 million) in the plant by 2025, with the majority of that funding earmarked for upgrades to production facilities.

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