German Auto Manufacturer Volkswagen Doesn’t Rule Off Factory Closures And Layoffs

The management of the German auto manufacturer Volkswagen has decided on a major austerity program until 2026 and wants to cancel the employment guarantee for around 110,000 workers to deal with a shortfall in the coffers of five billion euros.

At a crisis summit with the top managers, which was convened at short notice, the Volkswagen board informed the public today of its plans for restructuring and no longer excludes the closing of factories.

“The economic environment has deteriorated again, new suppliers are coming to Europe. In addition, Germany is particularly lagging in terms of competitiveness. We as a company now have to act consistently in this environment,” said Volkswagen CEO Oliver Blume.

Reducing the number of Volkswagen workers through partial retirement and severance pay is no longer enough to achieve the desired savings, management claims.

The company has been forced to end job security at Volkswagen which previously excluded the possibility of forced layoffs until 2029. Volkswagen previously announced in July that it was considering closing the factory of its luxury electric model Audi in Brussels due to weak demand for high-end electric cars.

The Brussels factory, where around 50,000 cars were produced last year, has problems with long-standing challenges such as high logistics costs. If the worst forecasts come true, Volkswagen will be forced to close one of its factories for the first time since 1988, reports Tanjug.

• Also See: Volkswagen Sells Fewer Cars As They Continue To Cut Cost