The German company Volkswagen plans to close at least three plants in Germany for the first time in 87 years.
There are also plans to lay off tens of thousands of workers and cut wages by 10%. VW executives have warned that it must take drastic measures due to fierce competition from China, slowing sales in other major markets and the need to shift to electric vehicles, Bloomberg writes.
Volkswagen first started talking about the possibility of closing German plants in September. At the time, VW CEO Oliver Blume said that “Germany as a place to do business is increasingly lagging behind in terms of competitiveness.”
In the summer of 2022, the then head of Volkswagen, Herbert Diess, called a sudden stop in gas supplies from Russia one of the biggest risks for the German automaker. However, at that time, he did not observe a drop in demand in the automotive sector.
VW employs about 650 thousand workers worldwide, almost 300 thousand at 10 plants in Germany.
Competition from China, problems with the German economy and an inadequate green agenda are hitting the German auto industry and Germany’s image as an automotive superpower. This forces German automakers to take such radical steps.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.