Management plans to close at least three local factories and cut tens of thousands of employees to cut operating costs, he said at a staff event at Volkswagen headquarters in Wolfsburg on October 28.
Cavallo said the board had carefully considered the plan and that all German factories could be affected by the closure plan and that other workers who had not been closed would also face pay cuts. The enterprise has informed its employees of the plan.The labor council said it was not yet clear exactly where the plant would be closed. However, the plant in Osnabruck, Lower Saxony, is seen as “particularly dangerous” because it has recently lost an expected order for a Porsche car. Gunar Killian, a board member of Volkswagen’s human resources department, said the company would not be able to afford future investments without comprehensive measures to restore competitiveness.
Internal and external squeeze Volkswagen cost reduction “for vitality”With German manufacturing falling, demand from overseas weakening and more competitors entering the European market, Volkswagen is under pressure to cut costs sharply to remain competitive. In September, Volkswagen announced plans to consider a large number of layoffs and close some of its German factories. If implemented, it would be the first time the company has closed its local factories since its inception. Volkswagen also announced that it would end a 30-year job protection agreement, which promises not to lay off workers until the end of 2029, and start the deal from mid-2025.
Volkswagen currently has about 120,000 employees in Germany, about half of whom work in Wolfsburg. Volkswagen now has 10 factories in Germany, six of which are located in Lower Saxony, three in Saxony and one in Hesse.
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