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Volkswagen. The automotive giant is to close three factories. Thousands of jobs at risk

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Volkswagen plans to close at least three German factories and thus eliminate tens of thousands of jobs, the head of the company's works council told Reuters. The pressure is growing not only on the group's management, but also on the German government.

The largest car manufacturer in Europe has been negotiating with trade unions for weeks. In addition to plans to reorganize operations and reduce costs, the closure of this manufacturer's plants is being considered for the first time Germany.

“They take this absolutely seriously.”

– Management takes this absolutely seriously. This is not just a negotiation tactic and sabre-rattling, said Daniela Cavallo, head of the Volkswagen works council.

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– Germany's largest industrial group wants to sell assets in its home country, Cavallo said. However, it did not specify which plants would be closed or exactly how many employees might be laid off. As many as 300,000 people are employed throughout the country in Volkswagen factories and offices.

Daniela Cavallo, chairman of the works council of Volkswagen AG and Thorsten Groeger, negotiator of the IG Metall trade union.PAP/EPA/JULIAN STRATENSCHULTE / POOL

Calls for an urgent rescue plan

This is another escalation of the conflict between Volkswagen employees and the group's management. The largest German automotive concern faces a growing challenge to maintain competitiveness in the face of weakening demand in China and Europe.

In the face of disappointing economic indicators, the pressure for action from the German government is also growing. Cavallo, in an interview with Reuters, noted that Berlin must urgently develop a rescue plan for German industry to ensure that it does not “go under.”

– We are aware of the difficulties Volkswagen is struggling with. We remain in close dialogue with the company and employee representatives, declared a spokesman for the German government in an interview with the agency.

He stressed, however, that any decisions may not “harm employees” in the future. – The goal now is to maintain jobs – he said.

Read more: The trade war between China and Europe is gaining momentum. Beijing imposed a tariff on brandy, but “it's about cars” >>>

Same diagnosis, different prescription

Cavallo said employees and management agree on the substance of the problems Volkswagen faces, from a slower-than-expected electric transition to fierce competition from Chinese automakers.

Information meeting of trade unions and the Volkswagen works councilPAP/EPA/JULIAN STRATENSCHULTE / POOL

We determine the cause of problems in the same way. However, what makes us different is how we want to solve them – she said.

The Volkswagen Group has a total of 121 production plants worldwide, 24 of which are located in Germany. The company's two largest factories are also located in this country – in Wolfsburg, where over 51,000 people are employed. people and Ingolstadt, where almost 42,000 people work. people.

More bad news

This is more bad news from the European automotive industry. Last week, Mercedes-Benz announced the necessity carrying out cost cuts. The Porsche brand, which is largely owned by Volkswagen, announced in turn closure of some showrooms in China due to weakening demand.

German car manufacturers fear that they will be targeted in the trade war between the European Union and China. High EU tariffs on Chinese electric vehicles are to come into force this week.

Main photo source: Shutterstock



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