Volkswagen is reportedly planning to shut down three factories in Germany and cut tens of thousands of jobs due to declining sales.
Volkswagen is also planning to cut at least 10% of salaries and freeze wages in 2025 and 2026.
This decision comes after the German automaker warned of a profit slump for the second time in less than three months, due to weak market demand, particularly in China and Europe, as well as challenges in the transition to electric vehicles.
The automaker stated that it will present proposals on how to cut labor costs on October 30, when workers and management meet for the second round of wage negotiations and the company announces its Q3 results.
If the shutdown plans go ahead, it will be the first time in its 87-year history that Volkswagen has closed factories in Germany. Currently, VW has 10 factories and 300,000 employees in Germany.
Automobile production is Germany’s most important industry, contributing 564 billion euros (610 billion USD) to the country’s economy. However, the German automotive industry is also heavily dependent on exports, especially to the Chinese market, where German manufacturers sold approximately 4.3 million cars in 2021.
In recent years, Chinese consumers have shifted towards using domestically produced electric vehicles instead of imported ones. This has resulted in a significant decline in demand for German cars.
TH (Tuoitrethudo)
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