VW’s Labor Unions Determined To Block Decision On New Plant In Turkey

Volkswagen’s powerful labor unions are determined to block the company’s plans of building their new $1.4 billion factory in Turkey until the country puts a stop to its offensive in northern Syria.

“I want to say very clearly: the labor representatives repudiate approval as long as Turkey tries to reach its political goals with war and force,” VW’s global works council chief and supervisory board member Bernd Osterloh in a staff newspaper seen by Bloomberg.

Earlier this month, the VW Group decided to put on hold the final decision on the Turkish factory, following criticism of the country’s military operations in Syria. Frank Witter, VW’s CFO, told reporters this week that the company is concerned about the political situation and is monitoring developments.

In addition, there’s no immediate time pressure for the German car maker to seek alternatives and capacity can be added at existing factories in Slovakia and elsewhere, Witter added.

Ever since news broke that VW is postponing the project in Turkey, countries like Bulgaria, Romania, Serbia and, more recently, Greece have expressed their interest to host the new $1.4 billion factory.

VW’s new plant is planned to produce the next-generation Passat and Skoda Superb, with an annual capacity of 300,000 vehicles. The original plan was to have the facility up and running by 2022.

Labor representatives have great power in decision-making at VW, accounting for half the seats on the supervisory board and having far-reaching veto rights. The board is scheduled to meet on November 15 for the annual review of the company’s 5-year spending plans, including capital allocation for its factories worldwide.