Volkswagen will reduce production of the ID.4 EV at its U.S. plant in Chattanooga, Tennessee. The company specifies it’s cutting production to two shifts, a measure dictated by caution due to stuttering demand for electric vehicles.
Volkswagen is offering employees affected by the production a “voluntary attrition program”, including severance pay, retirement options and benefits, a company spokesperson said.
Over at the United Auto Workers (UAW) union, reaction has been furious. Yesterday, the UAW filed a complaint against Volkswagen for unfair labour practices. The union claims that Volkswagen is trying to eliminate jobs at Tennessee plant, where the UAW is negotiating its first labour contract after workers voted to unionize last April.
As Automotive News reminds us, the vote won by the union made the Chattanooga plant the first auto plant in the South to unionize via a vote since the 1940s. It also became the first foreign-owned automotive assembly plant in the southern U.S. to do so.
The union and the company have been negotiating the plant's first labour contract since April.
"The UAW has notified the Trump administration of Volkswagen's unacceptable, anti-union, anti-worker and anti-American conduct," UAW president Shawn Fain said in a statement.
Volkswagen's response was clear: "We reiterate our commitment to our team members, our customers and our presence in Chattanooga. This change is in line with that commitment."
It's important to remember that Volkswagen isn’t cutting into its workforce only in Tennessee. The German automaker has made job cuts worldwide to cope with weakening demand and increased competition from Chinese manufacturers.
At the end of last year, Volkswagen announced its intention to cut more than 35,000 jobs after a fierce battle with unions in Europe.
And all this is happening against a backdrop of a trade war between the U.S. and Canada following tariffs levied by President Trump. The carmaker would be impacted by 25-percent tariffs on imports from Mexico and Canada. Those tariffs are mostly on hold until April 2, but no one knows what will happen afterward.
Among German automakers, the Volkswagen Group is the most exposed to potential U.S. tariffs, since Audi and Porsche don’t build vehicles in the U.S. Volkswagen also imports many vehicles made in Mexico.