Reports have surfaced indicating that unions and managers at Volkswagen are looking to stifle the competition from stalemate brand Skoda. They aim to move a portion of its production to Germany and increase the pay around shared technology.
While VW is currently struggling with job cuts and decrease spending at their German factories, as well as trying to move past their dieselgate scandal, stablemate Skoda is soaking up great vehicle reviews and profits; which in turn has caused a bit of a rivalry between the two brands internally.
Autoblog revealed that VW is looking to even up the playing field, as the view is that Skoda may have some unfair advantages. The feud between the two has created tension at Volkswagen Group when it comes to jobs and profits, as well as main autonomy and control around the 12 car brands.
One manager has been noted as saying that rather than devote efforts to surpass Tesla, there seems to be a set up around a pointless conflict internally.
Over the past 26 years, Skoda has transitioned nicely with the VW group and is now looked upon as a success when it comes to the mid-market auto manufacturer; consistently winning business from the competition, including VW, and passing the operating profit margin of Audi in 2016.
Currently, VW is dealing with job cuts in the thousands as officials plan to trim all the extras within their factories in Germany. The company’s domestic unions view the success of Skoda as a possible lifeline and threat to them right now.
Sources say workers’ reps at VW are currently asking to transfer some of Skoda production to underused German facilities. This move is in hopes to offset decreasing output when it comes to the Golf and Passat, where there is an underlying threat of more job loss.
Sources indicate that VW also believe that their stablemate should be required to dish out more for royalties when it comes to using VW’s common car platform.
Bohuslav Sobotka, Czech Prime Minister, responded to this news by saying he is open to meeting with Skoda management and unions to discuss clarification around the proposal. He added that the government will consider the VW plans to ensure everything is followed through and production is not taken out of the country where Skoda currently produces vehicles. The main union for Skoda stated that a shift in production could pay the company a price of 2,000 jobs. The works council at VW did not comment on this.
The tension between both these brands should continue to increase as a supervisory board session is expected on November 17th, where the yearly investment budgets for VW Group will be approved.
Only time will tell on how this will all roll out.
