German car marker Volkswagen has said it plans to close at least three car factories in the country, according to the company’s employee representative.
VW employs around 300,000 people across Germany and the Financial Times reports said the cuts could amount to tens of thousands of job losses.
Employee council chief Daniela Cavallo told at a meeting with Volkswagen workers today (Monday) at the company’s Wolfsburg headquarters that management also plans cuts at other sites, and pledged to resist the plans.
German news site DW reported she said that “all German VW plants are affected by these plans. None is safe.”
It’s reported German car manufacturing, which makes up around 5% of the country’s GDP, or £174 billion, has suffered under increasing pressure from China.
Volkswagen said in early September that auto industry headwinds mean it can’t rule out plant closures in its home country and must drop a job protection pledge in force since 1994 that would have barred layoffs through 2029.
CEO Oliver Blume cited new competitors entering European markets, Germany’s deteriorating position as a manufacturing location and the need to “act decisively.”
European automakers are facing increased competition from inexpensive Chinese electric cars. Volkswagen said last month that the company’s half-year results indicated it would not achieve its target of 10 billion euros (£8.3billion) in cost savings by 2026.
Volkswagen has some 300,000 employees in Germany, where it has 10 plants — six of them in the northern state of Lower Saxony, including Wolfsburg.
The IG Metall industrial union sharply criticised VW’s reported closure plans. Regional union leader Thorsten Gröger said: “We expect that, instead of cutback fantasies, sustainable concepts for the future be sketched out by Volkswagen and its management at the negotiating table.”
Pay negotiations between Volkswagen and the union are due to resume on Wednesday.
In a statement to Express.co.uk, Volkswagen said: “We are not taking part in speculation surrounding the confidential talks with IG Metall and the works council at collective bargaining and restructuring level.
“We are adhering to the agreed principle of conducting these discussions internally with our negotiating partners. The next collective bargaining meeting will take place on October 30.
“Volkswagen is at a decisive point in its corporate history. The situation is serious, and the responsibility of the negotiating partners is immense. The task now is to secure the future of Volkswagen AG with its Volkswagen Passenger Cars, Volkswagen Group Components and Volkswagen Commercial Vehicles in the long term together with the employee representatives.
“That is our goal. To this end, the Board of Management has submitted proposals for solutions to the employee representatives. In view of the developments in Germany as a business location, we must work together to find ways that will enable us to continue investing in our products and technologies on a sustainable basis.
“This is the only way we can rebalance the fundamental scales of profitability and employment.”
A spokesperson for the German Chancellor Olaf Scholz said: “The Chancellor’s position on this is clear, however, namely that possible wrong management decisions from the past must not be to the detriment of employees. The aim now is to maintain and secure jobs.”