A VW Golf GTI stands in the parking lot in front of the tower of the brand on the grounds of the VW factory in Wolfsburg.
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German car manufacturer Volkswagen there warned that it will no longer be possible to rule out the closure of plants in the country, the burden of the main cost-cutting measures in order to “future-proof” the company.
“The European automotive industry is in a demanding and serious situation,” Volkswagen Group CEO Oliver Blume said in a statement.
“The economic environment is becoming more difficult, and new competitors are entering the European market. In addition, Germany in particular as a manufacturing location is declining in terms of competitiveness.”
As a result, the chief executive of the Volkswagen Group said that the company “now has to act decisively.”
Shares of Volkswagen traded 2.4% higher on Friday afternoon.
Volkswagen said that the company’s brands must undergo a “complete restructuring,” before adding that the current situation means that even plant closures in vehicle production and component sites can no longer be ruled out.
The automaker said it needed to end the labor protection agreement – a job security program that has been in place since 1994 – to secure “urgently needed structural adjustments for greater competitiveness in the short term.”
“The situation is very tense and cannot be resolved by simple cost-cutting measures,” VW brand CEO Thomas Schäfer said in a statement.
“This is why we want to start discussions with employee representatives as soon as possible to explore the possibility of a sustainable restructuring of the brand,” he said.
Volkswagen said all necessary measures would be discussed with the General Works Council and the German trade union IG Metall.
