👉 Background: Volkswagen is the German car company founded back in 1937 and is best known for the iconic Beetle car. In 2016 and 2017, it was the largest car manufacturer worldwide.

👉 What happened: But lately Volkswagen has been doing it tough after the enormous costs of transitioning to electric vehicles, as well as intense competition from Chinese carmakers. So now it's planning to shut down at least three factories in Germany and lay off tens of thousands of employees as part of a major cost-cutting initiative.

👉 What else: This would be the first ever factory closure in Germany (VW's home country). But Volkswagen’s workers council is putting up a fight against this decision and threatened to strike if their needs aren’t met…which could put Volkswagen in even more jeopardy.

What's the key learning?

💡Labour relations is the relationship between company management and workers who are often represented by unions. And when relations get strained, it can be impactful enough to destabilise a company.

💡With VW facing serious financial challenges, it can amplify its conflict with its employees. And if all VW workers strike, it could lead to even more pain.

💡In 2019 48,000 employees from General Motors went on strike over issues like job security, better pay, and GM’s plan to shut down certain plants. The strike went for over 40 days, and ended up costing General Motors over $2 billion USD. So VW will be hoping it can sort this out sooner rather than later.