Automakers temporarily pause production and move things around between factories all the time, but Volkswagen has never closed a factory in its home country of Germany. That could change soon, however, as the automaker recently announced that it would consider plant closures there to help it cut expenses in its core product lines.
The move could save VW billions of euros, but it could impact a significant number of jobs. VW said it’s considering shuttering one of its large vehicle manufacturing plants and one component factory that it said are classified as obsolete. If it moves forward with the closures, it would be the first time in VW’s 87 years that it did so, and it would almost certainly generate friction with Germany’s imposing labor unions.
An official from the IG Metall union said, “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. We will not tolerate plans that the company makes at the expense of the workforce and that massively disrupt the regions in our country.”
Volkswagen has seen costs climb as it shifts to electrification, making it much more difficult for the company to realize profits on EV sales. The automaker has delayed or canceled some models, including at least one destined for the United States, so the only remaining lever it has left to pull is cutting labor costs.
Some of VW’s challenges come from China, where government subsidies and a strong push toward electrification have created a behemoth of an EV market that threatens global automakers in a way they haven’t seen before.
[Images: Volkswagen]
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