- Volkswagen is reportedly aiming to close three plants in Germany and lay off “tens of thousands” of employees.
- Additional details are expected later this week, but it sounds like we can expect deep cuts that will impact workers across Europe.
- The automaker is facing a multitude of issues including high costs, declining sales, and Chinese competition.
Volkswagen has been warning cuts are coming and it appears they’ll be pretty deep as the company’s works council has revealed the automaker is planning to close at least three different plants. This could result in “tens of thousands” of lay offs.
Additional information is expected later this week, but Reuters quoted the head of Volkswagen’s works council as saying “Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round.” Daniela Cavallo added the plan is the start of the “sell-off in … Germany.”
More: VW Could Cut Wages By 10% As Part Of Widespread Cost Savings
Besides plant closures, Cavallo reportedly confirmed plans for wage cuts of at least 10%. The publication is also reporting that she confirmed pay freezes for 2025 and 2026.
The automaker isn’t saying much publicly at this point, but board member Gunnar Kilian reportedly said the “situation is serious” and “without comprehensive measures to restore competitiveness, we will not be able to afford significant future investments.”
While the focus is on Germany, there are also expected to be cuts elsewhere. Details are limited, but the Brussels plant is believed to be on the chopping block as Audi wants to end Q8 e-tron production early as demand has dropped significantly. The fate of the facility has been up in the air since July and, earlier this month, reports surfaced that the company wasn’t able to find a suitable buyer despite 26 parties being interested.
Volkswagen has spent the past few months laying the groundwork for cuts and, in September, CEO Oliver Blume said “The European automotive industry is in a very demanding and serious situation.” He added that “new [Chinese] competitors are entering the European market” and “Germany, in particular, as a manufacturing location is falling further behind in terms of competitiveness.” Those statements came after the company announced a drop in sales as well as an 11% decline in operating profit for the first half of the year.
