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Volkswagen is considering closing a factory in Germany, it would be the first time in its history

2024-09-03 11:49:53Kosova&Bota SHKRUAR NGA REDAKSIA VOX
Volkswagen is considering closing a factory in Germany, it would be the first
Volkswagen

For the first time in its 87-year history, Volkswagen is considering closing a plant in Germany, citing the need to remain competitive.

German car giant Volkswagen said on Monday it could not rule out closing factories to cut costs by around 4 billion euros, more than originally planned in the original austerity plan.

The board of Volkswagen AG said that the current strategy of offering reduced contracts and early retirement of workers is no longer sufficient to meet the company's objectives and announced that it will end a job security program that has been in place since 1994.

"The European automotive industry is currently in a challenging and serious position," said Volkswagen AG CEO Oliver Blume. "The economic environment has deteriorated and new competitors are putting pressure on the European market. Germany is lagging behind as a competitive country. As a company, we must act."

Volkswagen has fallen behind the branches of the concern such as Skoda, Seat and Audi.

A series of cuts announced in 2023 were supposed to turn things around by saving around 10 billion euros by 2026, on the way to surviving the transition to electric cars.

However, the effort appears to be insufficient to fix the brand's accounts, which are in the red and suffering due to investments in electric vehicles, a slowing German economy and competition from Chinese manufacturers.

The German financial newspaper Handelsblatt reports that there should be an additional 4 billion euros in savings.

For this reason, the closure of a large car factory in Germany and also of a component factory is being considered.

Meanwhile, the head of the workers' council, Daniela Cavallo, has promised to resist the plans, which she called “an attack on our employment, our factories and our contracts. The very future of [the] Volkswagen, the heart of the company, is in question and we will stand firm. There will be no closure plan at Volkswagen with me"!

The IG Metall union called the announcement an irresponsible decision that "shakes the foundations" of the company, which is Germany's largest industrial employer and Europe's top carmaker by revenue. Clashes with unions have cost some Volkswagen executives their jobs. Unions are gearing up for wage negotiations set to begin this fall. Nearly half of Volkswagen's 650,000 workers around the globe are in Germany.

But the leader of the Volkswagen company, Thomas Schäfer, said that the company will remain committed to Germany "as a business location". Volkswagen added that: "The situation is extremely tense and cannot be resolved through simple cost-cutting measures."


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