Volkswagen Eyes Historic German Factory Closures for Cost Savings

Sep 2, 2024, 01:30 PM

Volkswagen is considering unprecedented factory closures in Germany as part of a strategy to achieve deeper cost savings. This move, if implemented, would mark the first time in the company's 87-year history that it has closed major factories in its home country. The decision comes amid a challenging economic environment, with the company struggling to cut costs due to a slowdown in consumer spending and increased competition from new market entrants. Volkswagen's Works Council has highlighted that all German locations are under scrutiny, with fixed product and investment commitments at risk. The potential closures pose a significant challenge to Chancellor Olaf Scholz's government and could lead to a clash with labor unions over job security. Volkswagen also intends to terminate collective labor agreements and has not ruled out compulsory redundancies.