Audi employees: If we need a plant in US, it cannot be at the expense of employees in Germany

Time of India

2 days ago

Donald Trump's plan to make Germany's leading car company set up a plant in America is reportedly facing a problem. And the problem is: Audi employees in Germany. According to a report in Bloomberg, a top labour official of Audi said that the German carmaker must secure jobs and production in Germany before building a factory in the US over President Donald Trump's tariffs.
The Volkswagen AG-owned brand is said to be reviewing several options for setting up its own manufacturing hub in the US, where VW already operates one plant and is building another for the Scout nameplate. Audi's labor leaders are willing to back an expansion in the country only if management gives long-term guarantees for jobs and output at home, said Jörg Schlagbauer, the company's works council chief.
In an emailed statement to Bloomberg, Schlagbauer, said, 'We are not refusing to discuss the matter, but for capacity reasons we do not see any need to build a plant in the US at present.' Schlagbauer is also Audi's deputy board chairman. He added, 'If we need a plant in the US for political reasons, it cannot be at the expense of employees and capacity utilization in Germany.'
In March this year, Audi reportedly reached an agreement with employee representatives to cut 7,500 German positions by 2029 via buyouts and early retirement. This agreement was in exchange for extending job security guarantees for remaining employees till 2033. Audi is reported to be in the process of informing employees about the offers, though so far 'no significant staff reductions' have taken place, a labor spokesperson said.
Donald Trump's tariff war on European car makers
In early 2025, President Donald Trump imposed a 25 per cent tariff on European car imports, significantly impacting the EU's automotive industry, which exports €56 billion in vehicles to the US annually. German carmakers like Volkswagen, BMW, and Mercedes-Benz, accounting for 73 per cent of the 820,000 EU cars exported to the US , face severe financial strain. Porsche, reliant entirely on imports, could lose €3.4 billion in earnings by 2026, while Stellantis reported a €2.3 billion net loss in the first half of 2025. The tariffs, effective April 3, 2025, aim to bolster US manufacturing but disrupt global supply chains, raising vehicle prices by an estimated $3,000.
A subsequent trade deal reduced tariffs to 15 per cent from August 1, offering relief but still exceeding the pre-2024 2.5 per cent rate. European automakers, already grappling with declining sales in China and EV transition costs, may pass costs to consumers or shift production to the US , as Volvo plans for its XC60. The EU is considering retaliatory tariffs, risking a broader trade war.