Volkswagen considering closure of three factories in Germany
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The first VW plant closures in history are being considered and may cost tens of thousands of German jobs.
Volkswagen has confirmed it is seriously considering the unprecedented move of closing as many as three of its German factories which may cost more than 10,000 jobs.
The car maker announced it could also scale down the size of its remaining German factories – with some roles outsourced – and cut wages of remaining staff by 10 per cent before a blanket wage freeze until 2027.
The move prompted the 300,000 workers at Volkswagen's 10 plants across the country to stop work for an hour in protest as unions organise to oppose the decision.
Further details – including which factories it will close – expected to be announced on 30 October when the car maker announces its third-quarter (July-September) financial results following sales declines in both Europe and China.
MORE: Volkswagen could close German plants as nation's manufacturing appeal "falls behind" – report
"This is the plan of Germany’s largest industrial group to start the sell-off in its home country," said Volkswagen's General Works Council Chairperson Daniela Cavallo according to Reuters.
"Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round."
"All German VW plants are affected by this. None of them are safe."
It would be the first time in history Volkswagen has closed a factory in Germany, having opened its Wolfsburg facility in the country's north in 1938 – currently one of the largest car factories in the world.
It may also close a plant in Brussels, Belgium, where production of the Audi Q8 e-tron – Audi being part of the broader Volkswagen Group – is set to end earlier than expected after slow sales.
The news comes as Volkswagen issued its second profit warning in three months, with the proposed closures and restructuring looking to save €4 billion ($AU5.57 billion) in costs.
Volkswagen Passenger Cars CEO Thomas Schafer told Euronews the car maker's operations “cannot continue as before”.
"We have to get to the root of the problems: we are not productive enough at our German sites and our factory costs are currently 25 to 50 per cent above target.
"This means that some of our German plants are twice as expensive as our competitors."
The car maker softened the ground for the announcement after Volkswagen Group CEO Oliver Blume told media in September German manufacturing was "falling behind in terms of competitiveness."
"It is well known that Volkswagen is in a difficult situation," a German government spokesperson told Reuters.
"The Chancellor’s position on this is clear, namely that possible wrong management decisions from the past must not be at the expense of employees. It is now a matter of preserving and securing jobs."
Works Council boss Ms Cavallo said the car maker had "massively damaged trust", and strikes were on the table if wage negotiations faltered.
In September 2024, reports suggested the brand was scurrying to regroup in the transition to electric cars, with Volkswagen finance boss Arno Antlitz suggesting the European market has contracted by around 500,000 cars since COVID.
In August 2024 the car maker delayed its next-generation electric vehicle project – codenamed 'Trinity' – until 2032, deciding to follow the cheaper route of using existing platforms for upcoming Volkswagen models instead.
It also confirmed it would continue producing the current generation Volkswagen Golf with petrol engines until as late as 2035 – when the European Union's internal combustion engine ban comes into force – alongside a new battery-electric Golf due in 2029.
The threat of Chinese-made electric vehicles has also been a factor with the European Union (EU) voting to impose tariffs as high as 45 per cent in Chinese-made vehicles from 31 October 2024.
Yet German car makers – including Mercedes-Benz and Porsche – have also seen previously high sales volumes in China nosedive, too, as Chinese buyers adopt domestic car brands instead.
In Australia, the Volkswagen ID.4 – the first battery-electric car it will offer here – is due in local showrooms in early December 2024 as a rival to the Tesla Model Y.
The ID. Buzz – a modern electric take on the classic Kombi – is also set to arrive in Australia the same month.
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