VW Mulls Closing German Factories, A First In Its 87-Year History

Volkswagen is considering closing factories in Germany for the first time in its 87-year history as the carmaker battles to cut costs and survive the transition to electric cars, Chris Price reported for The Telegraph.

Volkswagen, founded in 1937, said that it could no longer rule out plant closures in Germany as it seeks ways to save several billion euros.

Volkswagen, founded in 1937, said that it could no longer rule out plant closures in Germany as it seeks ways to save several billion euros.

The plan has put the car giant on a collision course with unions, who called it a “black day” for the company. VW, which also owns brands including Audi, Seat, and Skoda, considers one large vehicle plant and one component factory in Germany to be obsolete.

The powerful works council union vowed “fierce resistance” to the executive board’s plans.

Fellow union IG Metall called the threat of job losses and factory closures an irresponsible decision that “shakes the foundation” of the company. “The austerity program has escalated and is resulting in a major conflict between management and the general works council,” IG Metall said.

Bosses are also planning to end the group’s job security program, which has been in place since 1994 and prevented job cuts until 2029. VW said all measures would be discussed with the works council. Chief Executive Oliver Blume said,

“The economic environment has become even tougher, and new players are pushing into Europe. Germany as a business location is falling behind in terms of competitiveness.”

The Volkswagen brand, which fuels most of the carmaker’s sales, is the first of the group’s marques to undergo a cost-cutting drive. It is targeting €10 billion (£8.4 billion) in savings by 2026 as it attempts to streamline spending.