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Germany’s Automaker Volkswagen To Shut 3 Factories

By Stefan J. Bos, Chief International Correspondent Worthy News

BUDAPEST/BERLIN (Worthy News) – Volkswagen, one of Germany’s largest automakers, intends to close three factories, impacting thousands of jobs, its works council said Monday.

Thousands gathered in Wolfsburg, where the firm has been headquartered for nearly nine decades. Blowing horns and whistles, workers insisted that no plant should shut.

However, Volkswagen reiterated on Monday, that restructuring was needed and said it would make concrete proposals on Wednesday.

“Management is absolutely serious about all this. This is not saber-rattling in the collective bargaining round,” confirmed Daniela Cavallo, Volkswagen’s works council head.

“This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany,” Cavallo added, not specifying which plants would be affected or how many of Volkswagen Group’s roughly 300,000 staff in Germany could be laid off.

She said Volkswagen also plans to cut salaries at the brand by at least 10 percent and freeze pay in 2025 and 2026.

It comes as Germany, famed for its car industry, experiences social and economic difficulties and high production costs.

EU PUSH

Thomas Schaefer, the CEO of Volkswagen passenger cars, said its German factories were not productive enough adding that plant costs were “as much as 50 percent above what the company had budgeted for, making individual factories twice as expensive as the competition.” In addition, we at Volkswagen still handle many tasks internally that the competition has already outsourced more cost-effectively,” he stressed.

The European Union’s push toward the so-called “green energy” transition away from Russian oil, natural gas, and electric vehicles has also been linked to the current troubles in Europe’s largest economy.

The crisis comes after Volkswagen tried to overcome the aftermath of its 2015 diesel scandal, also known as Dieselgate, which cost tens of billions of dollars.

Last year, ex-Audi boss Rupert Stadler received a suspended sentence of one year and nine months by a German court, becoming the first former board member to receive such a sentence.

Volkswagen admitted that it had intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing.

The software switched off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit.

Besides paying nearly $900 million to impacted customers, Volkswagen made its biggest payout over the diesel scandal in the United States, where the environmental authorities revealed its emissions test cheating in September 2015.

So far, the company has paid over 32 billion euros ($34.7 billion), mainly in fines and damages in the U.S., while its shares struggle.