Germany’s Volkswagen, Europe’s largest carmaker, has closed its factory in Germany for the first time in its 87-year history and is seeking to restructure its workforce.
Volkswagen CEO Oliver Blume is said to have formalized the plan at a labor-management council, saying “the European auto industry is facing a very difficult and serious situation.”
Management is reportedly considering closing at least one finished car plant and parts plant in Germany.
Germany’s Spiegel magazine estimated that factory closures and restructuring could lay off some 20,000 people, or about one-fifth of all German employees.
Volkswagen executives also reportedly said they would end the employment security agreement they had maintained since 1994.
Volkswagen has recently set a goal of cutting costs by more than 20 trillion won by 2026, as profitability has deteriorated due to weak demand for electric vehicles and a barrage of Chinese companies.
However, the union said the management’s plan was an attack on jobs, labor sites and collective agreements, signaling a struggle.
JULIE KIM
US ASIA JOURNAL
