VW Plans Major Shakeup with German Plant Shutdowns and Job Cuts

Volkswagen is set to make significant changes as it plans to close at least three German factories and cut thousands of jobs, as per the latest updates from employee representatives. In addition to shutting down these facilities, VW also intends to downsize its remaining plants and reduce wages by 10% for those still employed.

ArrayFacing sluggish demand in both Chinese and European markets and grappling with a challenging transition to electric vehicles, Volkswagen has issued its second profit warning in just three months. As part of its cost-cutting measures, the company plans to implement a two-year wage freeze starting in 2025 and remove a monthly €167 collective bargaining bonus, among other incentives.

If these factory closures proceed, it will mark the first time in Volkswagen's 87-year history that the company has shut down a production plant in Germany. With 10 plants and a workforce of 300,000 across the country, Volkswagen now faces calls from unions for clear communication on the long-term impact of these decisions.

Also read: After 40 Years, VW Polo Production Ends as Volkswagen Embraces EV Future

These actions underline Volkswagen’s response to increasing competition from Chinese brands and changing consumer behavior. As the company embarks on this difficult restructuring phase, the automotive industry watches closely to see the effects on Germany's manufacturing landscape.

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