Symbolizing the collapse of the German economy… Volkswagen to close 3 factories and lay off thousands of workers
The Volkswagen Group’s workers’ council said the group plans to close at least three factories in Germany and lay off tens of thousands of workers.
During an awareness event in Wolfsburg, where the company is headquartered, the chairwoman of the group’s works council, Daniela Cavallo, explained on Monday that Volkswagen had informed employee representatives of these plans.
“The board of directors intends to close at least three Volkswagen plants in Germany,” Cavallo said, noting that all remaining sites are expected to be downsized.
According to the works council, the company’s plant in Osnabrück is particularly threatened, having recently lost a follow-up order it had hoped to secure from Porsche.
Cavallo added that the board of directors is planning layoffs for reasons related to operating conditions, noting that tens of thousands of jobs are at risk of being lost, as entire departments are scheduled to be closed or transferred abroad.
“All Volkswagen plants in Germany are affected by these plans… No plant is safe,” Cavallo added, without providing further details.
Volkswagen employs about 120,000 people in Germany, about half of them at it headquarters in Wolfsburg.
Volkswagen operates a total of ten plants in Germany, six in Lower Saxony (where Wolfsburg is located), three in Saxony and one in Hesse.
In September, Volkswagen scrapped its employment guarantees that had lasted for more than 30 years, making it possible to lay off workers for reasons related to working conditions from mid-2025.
Volkswagen and the metalworkers’ union IG Metall will hold the second round of negotiations on the wages of Volkswagen workers on Wednesday.
It’s noteworthy that in the first round of negotiations held last September, Volkswagen rejected the union’s demands for a 7% wage increase, and instead urged the company to reduce costs.
According to Cavallo, Volkswagen is now demanding a 10% pay cut and a freeze on increases for the next two years.
Volkswagen announced early last month that it was no longer unlikely to resort to closing factories and laying off workers for reasons related to operating conditions; but it’s not yet clear what measures the company will take to reduce costs.
German carmaker Volkswagen declined to comment on a report that it was making sweeping pay cuts at its eponymous flagship brand.
“We’ll not engage in speculation about the confidential talks with the IG Metall union and the works council,” a spokeswoman for the group said.
Handelsblatt reported earlier that Volkswagen was demanding a 10% pay cut and a two-year wage freeze in the current round of negotiations.
The company’s workers’ council plans to hold awareness-raising events at all sites on Monday to update employees on the latest developments in the round of negotiations.
The second round of negotiations between the group and the union on wages for the 120,000 employees of the central brand will be held the day after, Wednesday.