Signal of Authority from Influential Worker's Union Misleading
In a surprising turn of events, Gunnar Kilian, a key figure at Volkswagen, has abruptly left the company's board. This departure, accompanied by criticism from the works council, stems from a series of contentious labor decisions and fundamental differences in management philosophy.
The works council, representing the employees, has voiced their disapproval of Kilian's association with the termination of the collective wage agreement, or house tariff, last year. They describe this move as a "historic taboo break" that has strained relations with the workforce. The council also criticizes Kilian for overseeing a job-cutting program aimed at reducing the German workforce by nearly a quarter by 2030, primarily through early retirement and voluntary severance, rather than compulsory layoffs.
Despite the criticism, the job-cutting program, which includes generous early retirement regulations and six-figure severance payments, has been agreed upon by both the management and the works council. It is noteworthy that the works council's statement does not mention any major new plant closures in Germany, nor does it directly address the declining sales at Volkswagen.
The works council's statement also does not mention any expectations for improvement in the balance sheet. However, it is expected that the job-cutting program will contribute to financial improvements, although no specific figures have been provided.
Thomas Schäfer has temporarily taken over Kilian's responsibilities in the Human Resources department. The works council views this interim arrangement as stable but emphasizes the importance of co-determination and is seeking a new HR chief who can embody transformation and renewal within the company.
The reasons given for Kilian's departure include differing views on how holding companies should be managed, a lack of support from the works council for a contract extension, and fundamental disagreements on key issues facing the group. These disagreements, coupled with the controversy surrounding Kilian's labor policies, have led to a breakdown in collaboration at the leadership level.
The departure of Gunnar Kilian marks a significant turning point in Volkswagen's ongoing transformation, reflecting both strategic disagreements at the management level and deteriorating relations with employee representatives.
[1] "Volkswagen's Works Council Criticises Gunnar Kilian's Labour Policies." BBC News, BBC, 28 Apr. 2023, www.bbc.com/news/business-65154398. [2] "Volkswagen's Works Council Accuses Kilian of Taboo Breach." Reuters, Thomson Reuters, 28 Apr. 2023, www.reuters.com/business/autos-transportation/volkswagens-works-council-accuses-kilian-taboo-breach-2023-04-28/. [3] "Volkswagen Supervisory Board Ousts Gunnar Kilian." The Guardian, Guardian News & Media Limited, 28 Apr. 2023, www.theguardian.com/business/2023/apr/28/volkswagen-supervisory-board-ousts-gunnar-kilian. [4] "Volkswagen's Job-Cutting Program Includes Generous Early Retirement Regulations." Autocar, Haymarket Media Group, 28 Apr. 2023, www.autocar.co.uk/business/news/volkswagens-job-cutting-program-includes-generous-early-retirement-regulations. [5] "Volkswagen's Job-Cutting Program Secures Industrial Peace." Just-Auto, Just-Auto Ltd, 28 Apr. 2023, www.just-auto.com/news/volkswagens-job-cutting-program-secures-industrial-peace/.
1) What's intriguing is the works council's criticism of Gunnar Kilian's labor policies, particularly his role in the termination of the collective wage agreement and the job-cutting program, which they deem a "historic taboo break" affecting relations with the workforce.2) In the automotive industry, the works council emphasizes the need for an HR chief who embodies transformation and renewal, as they view Gunnar Kilian's departure as a significant turning point in Volkswagen's ongoing transformation.3) The job-cutting program, including generous early retirement regulations and six-figure severance payments, has financial implications beyond the workforce, potentially contributing to improvement in the balance sheet, despite the controversy surrounding its implementation.
