Volkswagen announced to its employee representatives that it plans to shut down a minimum of three manufacturing plants in Germany, according to information shared by the head of the company’s works council on Monday.
Daniela Cavallo, the works council leader, addressed VW workers at the Wolfsburg headquarters and stated that management is considering reductions at other locations as well, and she has committed to opposing these proposed changes, as reported by German news agency dpa. Cavallo indicated that “all German plants of VW are subject to these plans. No site is secure.”
There has been no official statement from Volkswagen regarding this issue.
In early September, the company expressed that challenges within the auto industry have led to uncertainty about the future of its facilities in Germany, resulting in the abandonment of a job protection agreement that had been in place since 1994, which prohibited layoffs until 2029. CEO Oliver Blume pointed to the emergence of new competitors in the European market, the decline of Germany’s manufacturing allure, and the pressing need for the company to “act decisively.”
The European automotive market is experiencing intensified competition, particularly from budget-friendly electric vehicles manufactured in China. Last month, Volkswagen revealed that their financial results for the first half of the year suggested they might fall short of their goal to save 10 billion euros (approximately $10.8 billion) by the year 2026.
In Germany, Volkswagen employs around 120,000 workers and operates ten plants, six of which are located in Lower Saxony’s northern region, including the main plant in Wolfsburg.
The IG Metall industrial union criticized Volkswagen’s reported plans for plant closures. Regional union leader Thorsten Gröger expressed expectations that VW’s management will present sustainable future plans rather than ideas focused on cuts during upcoming negotiations.
Discussions regarding pay between Volkswagen and the union are scheduled to continue on Wednesday.