Volkswagen plans plant closures and forced layoffs in Germany as part of its cost-cutting program. In response, the German carmaker’s management announced that it would cancel a long term agreement with workers in a country that ruled out compulsory layoffs until the end of 2029.
The company said executives believe the Volkswagen brand needs to be completely restructured and that current efforts to reduce headcount through early retirement models and severance packages voluntary dismissal They will not be enough to achieve savings goals.
Volkswagen closes factories in Germany
The German consortium said that “in the current situation, the closure of vehicle production plants and components if prompt action is not taken.
The brand’s union leaders have said they will wage an all-out battle against the plan. Volkswagen works council chief Daniela Cavallodescribed the builder’s plans as an “attack on employment, jobs and collective agreements” in a special issue of the works council’s journal, which DPA had access to.
“This calls into question Volkswagen itself and thus the core of the group. “We will defend ourselves fiercely against this,” Cavallo wrote in his message to workers.
Cost reduction
Volkswagen’s core brand has been struggling with high costs for years and is lagging far behind group companies such as Skoda, Seat and Audi in terms of profitability. The cost reduction program launched in 2023 aimed to improve this situation, while also aiming to improve profits in 10 billion euros by 2026. However, the current weakness of new businesses has further aggravated the situation.
“The headwind has become much stronger,” said the Volkswagen boss. Thomas Schäferin the statement. “This is why we must redouble our efforts and create the conditions for long-term success,” he said.
