Volkswagen is weighing whether to close factories in Germany for the first time in its 87-year history as it moves to deepen cost cuts amid rising competition from China’s electric vehicle makers.
In a statement Monday, the German automaker, one of the world’s biggest car companies, said that it could not rule out plant closures its home country. Other measures to “future-proof” the company include trying to terminate an employment protection agreement with labor unions, which has been in place since 1994. “The European automotive industry is in a very demanding and serious situation,” said Volkswagen Group CEO Oliver Blume.
“We have done all the organizational steps needed. And now it is about costs, costs and costs,” he added. Volkswagen’s cost-cutting plans will face heavy resistance from labor representatives, which hold almost half the seats on the company’s supervisory board, the body that appoints executive managers. IG Metall, one of Germany’s most powerful unions, on Monday blamed mismanagement for the firm’s shortcomings and vowed to fight to protect jobs.
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