FX.co ★ Volkswagen Considering Closure Of German Plants To Cut Costs

German automotive giant Volkswagen announced on Monday that it is contemplating the closure of two of its factories in Germany as part of its cost-reduction strategy.

The Wolfsburg-based company informed its works council, which represents its employees, that it is considering shutting down "at least one major vehicle manufacturing plant and one component factory in Germany" to achieve savings amounting to billions of euros.

In a written statement, Volkswagen Group CEO Oliver Blume remarked, "The European automotive industry is confronted with a very demanding and serious situation. The economic landscape has become increasingly challenging, and new competitors are penetrating the European market. Furthermore, Germany's position as a manufacturing hub is deteriorating in terms of competitiveness."

Volkswagen suggested that its array of brands would necessitate a "comprehensive restructuring." The company emphasized that the severity of the current situation has reached a level where the closure of manufacturing and component sites can no longer be dismissed.

Thomas Schafer, CEO of the VW brand, echoed this sentiment, stating, "The situation is exceedingly strained and cannot be resolved through simple cost-cutting measures. Therefore, we intend to initiate discussions with employee representatives at the earliest opportunity to explore sustainable restructuring options for the brand."