Volkswagen may have to closing factories in Germany for the first time in its 87-year history and renege on a no-retrenchment pledge that was meant to last until 2029.
The “urgently necessary structural adjustments” were due to tougher competition, especially in the electric car market, and at least two obsolete factoriesofficials said, Reuters reported. Competition in the electric vehicle market from China was also a factor.
“The European car industry is in a very demanding and serious situation,” Volkswagen Group CEO Oliver Blume said in a statement on Monday. The advent of new competitors in Europe’s markets combined with Germany’s loss of manufacturing cachet pointed to a need to “act decisivelyBlume said in the statement obtained by The Associated Press.
Although cost-cutting measures had an effect, it was not enough because “the headwinds have become significantly stronger,” said Thomas Schaefer, CEO of the Volkswagen Passenger Car Division. “The situation is extremely tense and cannot be resolved by simple cost-cutting measures.”
Schaefer and Arno Antlitz, the company’s chief financial officer, were to meet with staff on Wednesday morning, Reuters reported. Daniela Cavallo, a member of the powerful IG Metall union and head of Volkswagen’s works council, promised the meeting would be “very uncomfortable” for management, according to Reuters.
With News Wire Services
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