Volkswagen Restructuring Plan Gets Union Support, But What Does It Mean for Ducati?

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On Tuesday, the Volkswagen Group struck a major deal with its union-back workforce, which will see the German automotive conglomerate begin a new restructuring plan.

The linchpin for the restructuring plan is a €1 billion commitment to make a new battery factory for future electric vehicle models, which will be located in Lower Saxony.

This is important because Volkswagen CEO Herbert Diess has been on a mission to slim down the VW Group, but his workforce, more specifically its labor unions, have been resistant to this change, as it would inevitably mean fewer jobs for its labor force.

Now with a substantial commitment to create jobs in the battery cell production space, VW’s labor unions are more amenable to the idea of trimming VW’s non-core businesses, which has some big implications.

For example, a report from Reuters suggests that the first move from Diess will be for VW to spin-out its engine business in MAN Energy Solutions, which provides diesel engines for ships and power stations.

What does this all mean for us in the motorcycle industry, though? Those who remember the politics of Ducati’s business operations over the last few years will remember that the Italian brand was put up for sale several times, with the labor unions continuously blocking the sale to potential suitors.

But now with the labor unions seeing their jobs secured in the future of the new battery plant, Diess and Volkswagen Group will have fewer challenges in selling assets it deems non-core or unprofitable – and this could apply to Ducati Motor Holding.

It is perhaps a good thing then that Ducati sales are looking stronger this year already, but one has to wonder how committed VW is to keeping the motorcycle brand as the landscape for transportation continues to change.

To that end, the Reuters report contains a final ominous point from labor union chief Bernd Osterloh, which may shed some light on the news headlines that we can expect from VW later this year.

Accordingly, Osterloh said he would agree to divestitures so long as the selling of those business assets made sense, and that “the terms and conditions for employees in units which have been earmarked for disposal are not watered down.”

This effectively means that as long as VW remains net positive on its workforce numbers between its divestitures and new business ventures, the labor unions won’t make too much of a fuss.

This would seem to open a door for Ducati’s sale to another company, if VW still choose to go down that path. Stay tuned.

Source: Reuters

Jensen Beeler

Despite his best efforts, Jensen is called one of the most influential bloggers in the motorcycle industry, and sometimes consults for motorcycle companies, whether they've solicited his expertise or not.