- Volkswagen could be closing up to three factories in Germany.
- It could also lay off tens of thousands of employees.
- The automaker is facing pressure to reduce costs amid weak demand and increasing competition.
Volkswagen employees in Germany are likely preparing for a fight. The automaker is facing some financial hurdles and will likely have to take drastic action to reduce costs. We’ll get our first look at VW’s proposals later this week, but the company could be on the brink of closing at least three plants in the country while laying off tens of thousands, according to a report from Reuters.
Daniela Cavallo, the head of VW’s works council, revealed the plans to Reuters, saying, “Management is absolutely serious about all this.” However, he didn’t provide specifics to the publication.
Closing three plants in Germany would be a huge blow, but it has been rumored before. Last month, a report stated that VW Group was considering closing two plants in Dresden and Osnabruck, which hasn’t happened since the company’s founding.
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Photo by: Volkswagen
VW has been negotiating with its unions for weeks on the matter, which VW brand CEO Thomas Schafer previously said “cannot be overcome by simple cost-cutting measures.” According to Shafer, the company’s German plants aren’t efficient enough.
Volkswagen Group board member Gunnar Kilian told Reuters that the automaker it doesn’t take “comprehensive measures to regain competitiveness,” it won’t be able to invest in future products properly.
Automakers across the board have been facing various struggles since the pandemic. Stricter regulations with battery-electric vehicles, increasing competition, especially in and from China, and softening demand for EVs elsewhere are pressuring companies to cut costs to remain competitive.