Volkswagen threatens to close its factories in Germany for the first time
Heba Beards
It seems that the effects of the global economic crisis and the emergence of new competitive markets have started to take their toll on the giants of the automotive industry, particularly on the German company Volkswagen, which has announced that it could start closing factories and laying off large numbers of employees.
Following a meeting of the company’s executive board, Volkswagen announced the end of the “job guarantee” (protection against dismissals) in force until now, which excluded dismissals for operational reasons until 2029.
The statement added that the job cuts planned so far through early retirement and end-of-service benefits are no longer sufficient to achieve the desired austerity goals. “From a company perspective, restructuring based solely on demographic trends is not sufficient to achieve the necessary short-term structural adjustments to strengthen… competitiveness.”
The breakdown of the job protection agreement with the unions thus threatens around 683,000 workers worldwide, including 295,000 in Germany, according to its latest results report.
It is worth noting that the German auto giant began cutting costs by €10 billion at the end of last year and lost share in its largest foreign market, China. In the first half of the year, customer deliveries fell by 7% compared to the same period in 2023, and the group’s operating profit fell by 11.4% to €10.1 billion ($11.2 billion).
