A Volkswagen Golf GTI is parked in the parking lot with a view of the brand tower inside the Volkswagen factory in Wolfsburg.
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german car manufacturer Volkswagen It warned on Monday that it would no longer rule out closing factories in the country, citing the possibility of major cost-cutting measures to ensure the company is “future-proofed”.
“The European automotive industry faces a very demanding and serious situation,” Volkswagen Group CEO Oliver Blume said in a statement.
“The economic environment has become more severe and new competitors are entering the European market. In addition, Germany, especially as a manufacturing base, is falling further behind in terms of competitiveness.”
As a result, the Volkswagen Group CEO said the company “must take decisive action now”.
Shares of Volkswagen rose 2.4% on Monday afternoon.
Volkswagen said a “comprehensive restructuring” of brands within the company was needed, adding that the current situation meant that even the closure of car production and parts plants could no longer be ruled out.
The carmaker said it felt the need to terminate its Employment Protection Agreement, a job guarantee scheme in place since 1994, to ensure “urgent structural changes are needed to improve competitiveness in the short term”.
“The situation is extremely tense and cannot be resolved by simple cost-cutting measures,” Volkswagen brand CEO Thomas Schaefer said in a statement.
“That is why we want to start discussions with employee representatives as soon as possible to explore the possibility of sustainably restructuring the brand,” he added.
Volkswagen said all necessary measures will be discussed with the General Works Council and German trade union IG Metall.
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