Volkswagen notified employee representatives of its plans to close at least three factories in Germany. Daniela Cavallo, the company’s general and group works council chair, shared the news with Volkswagen workers at the automaker’s headquarters.
Cavallo indicated that management also intends to make further cuts at other locations. She vowed to oppose the measures, noting that the plans would affect all German Volkswagen plants.
Ending a 30-Year Promise
Volkswagen Chief Personnel Officer Gunnar Kilian stated that the company must take significant steps to restore competitiveness.
Volkswagen did not disclose which factories would close or face cuts. However, the closures would end the company’s 30-year job protection pledge that barred layoffs until 2030.
Facing Industry Headwinds
In September, the automaker stated that it could not rule out factory closures in Germany, citing new competitors in Europe and Germany’s declining status as a manufacturing hub. The company also said that it does not expect to reach its goal of $10.8 billion in financial savings by 2026.
Getting the Union Involved
Reports of the possible plant closures come as Volkswagen negotiates wages with the IG Metall union, which represents the majority of the automaker’s workers. The New York Times reported that the union is seeking a 7% wage boost.
Volkswagen’s German operations include approximately 120,000 workers across 10 plants.
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