Volkswagen shutting 3 German factories, laying off thousands of employees
Volkswagen, Europe's largest carmaker, is planning a major restructuring involving the closure of at least three factories in Germany, and layoffs of tens of thousands of employees. The company is also considering downsizing its remaining facilities in the country. The details were revealed by Daniela Cavallo, head of Volkswagen's works council during a meeting with employees in Wolfsburg today.
Management is committed to restructuring
Cavallo stressed on the management's seriousness about this restructuring plan. She said, "Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round." However, she did not specify which plants would be affected or how many of Volkswagen Group's roughly 300,000 German employees could be laid off.
Restructuring plan intensifies conflict with workers
The restructuring plan has further deepened the battle between Volkswagen's workers and its management. The latter is under immense pressure to cut costs and stay competitive amid falling demand from China and Europe. The move also adds pressure on the German government, which is dealing with a stubbornly weak economy.
Cavallo urges Berlin to act
Cavallo urged the German government to urgently devise a comprehensive plan for its industry, warning it could otherwise "go down the drain." She acknowledged both sides agree on the challenges faced by Volkswagen and other European carmakers. These include a slower-than-expected transition to electric vehicles and intense competition from Chinese manufacturers entering Europe.
