Volkswagen Layoffs: Car Maker To Fire Several Employees, Close 3 German Plants

Europe's largest carmaker has been negotiating with unions for weeks regarding its plans to revamp its business & reduce costs, including the potential closure of plants in Germany for the first time

German automobile maker Volkswagen is set to close at least three factories in Germany, laying off tens of thousands of employees and downsising its remaining plants in Europe’s largest economy. This decision comes as part of a more extensive overhaul than previously anticipated, according to the head of the carmaker's works council.

Europe's largest carmaker has been in negotiations with unions for weeks regarding its plans to revamp its business and reduce costs, including the potential closure of plants in Germany for the first time. "Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round," Daniela Cavallo, head of Volkswagen's works council, informed hundreds of employees in Wolfsburg on Monday.

"This is the plan of Germany's largest industrial group to start the sell-off in its home country of Germany," Cavallo stated, without detailing which plants might be impacted or the number of Volkswagen Group's approximately 300,000 employees in Germany that could face layoffs.

These comments also intensify the pressure on the German government to address the ongoing weakness of its economy. 

Cavallo emphasised that Berlin must urgently develop a comprehensive strategy for German industry to prevent it from "going down the drain." 

She noted that there is mutual understanding between both parties regarding the challenges facing the carmaker and many of its European counterparts, including a slower-than-expected transition to electric vehicles and increasing competition from Chinese automakers entering the European market.

"We are not far apart when it comes to analysing the problems. But we are miles apart on the answers to them," he said. 

Previously, in a meeting with employees, CEO Oliver Blume announced that the company must abandon its job protection pledge, which was established three decades ago and prevented layoffs until 2029. Management indicated that the core brand needs to achieve 10 billion euros in cost savings by 2026, citing an excess of factory capacity compared to current needs and a contraction in the European car market since before the COVID-19 pandemic.