VW Battle Brews as Lingering Chip Shortage Hits Workers’ Wallets

(Bloomberg) -- Volkswagen AG plans to cut nearly all night shifts at its main plant in Germany that are a boon to workers as Europe's largest carmaker continues to battle the semiconductor crisis.

VW will cut the night shift, for which workers receive extra pay, from the start of the second quarter on three assembly lines in Wolfsburg, the carmaker said Friday, confirming a post on its intranet seen by Bloomberg News. The move has drawn ire from labor leader head Daniela Cavallo, who said a compromise on compensation must be found.

“Our colleagues aren't responsible for the fact that order books are overflowing while we can't make the vehicles because of the lack of semiconductors,” Cavallo said in the post. “We'll fight for partial compensation.”

Only a fourth assembly line that handles the Tiguan and its hybrid models, the Touran and Seat Tarraco will continue to run early, late and night shifts, VW said.

Factory workers at Volkswagen have been on edge amid growing tensions between VW's powerful union leaders and CEO Herbert Diess, who hinted at possible job cuts in November to stay competitive in the face of Tesla Inc. and the shift to EV production. The global shortage of chips forced Volkswagen to slash output at the sprawling Wolfsburg factory last year.

The decision to cut the night shift was made in response to repeated short-notice cancellations and the need to furlough workers, the company said.

“It is unavoidable that we adjust our shift model to maintain competitiveness and secure jobs in the long term,” said Gunnar Kilian, the board member in charge of personnel. “Unfortunately, this step will also involve workforce cuts and the loss of hardship allowances for the night shift.”