The Volkswagen brand is trying to drastically reduce its costs by 2026 in order to finance the electrification of its range.
Volkswagen is not ruling out closing factories in Germany as it seeks to save billions more as part of a cost-cutting programme at its namesake brand, the carmaker and its works council said on Monday.
The group considers a large vehicle plant and a component manufacturing site in Germany to be obsolete, according to the works council, which has promised “fierce resistance” to management’s plans.
Volkswagen also announced the end of its job security program in place since 1994, which prevented any job cuts until 2029. The group said that all measures will be discussed with the works council.
“The situation is extremely tense and cannot be overcome by simple cost-cutting measures,” VW brand boss Thomas Schäfer said in a written statement.
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“Irresponsible plan” for the IG union
The Volkswagen brand, which remains the main sales pole of the group which also owns Audi, Seat, Skoda and Porsche, is the subject of a cost reduction program targeting 10 billion euros of savings by 2026 in order to finance the electrification of its range.
“The difficult economic environment, increased competition in Europe and the declining competitiveness of the German economy have forced the German manufacturer to take additional measures,” said Volkswagen Group CEO Oliver Blume.
This restructuring project of the Volkswagen brand calls into question the foundations of the German group, denounced a representative of the IG Metall union.
“The board of management has today presented an irresponsible plan that shakes the foundations of Volkswagen and poses a massive threat to jobs and sites,” Thorsten Gröger said in a statement released after the group’s announcements.
“We will not tolerate plans that the company is developing to the detriment of employees and which massively disrupt the regions of our country,” he added.
