VW Considers Closing German Plant, Cutting Costs For First Time in History

According to VW's news release on the 2nd, the measures being discussed are aimed at other group companies in addition to the VW brand. In addition to the closure of factories, the intention is to terminate the agreement with labor unions to guarantee employment until 2029.

If the plants within Germany are closed, it will be the first time in VW's 87-year history that it has clashed with labor unions.

Volkswagen Chief Executive Officer (CEO) Oliver Brummel said in a published text, "The economic environment is tougher and new competitors are entering the European market." He wrote: "Germany as a place of business is gradually falling behind in terms of competitiveness."

VW is considering closing at least one car plant and one parts plant within Germany as it scraps the wage deal.

VW employs about 650,000 people around the world, about 300,000 of whom work within Germany. Half of the seats on the company's supervisory board are held by workers' representatives, and the state of Lower Saxony, which owns 20 percent of the shares, mostly sides with the unions.