Volkswagen's employee council says the automaker plans to close at least 3 German plants

A view of the Volkswagen plant in Zwickau, Germany, Oct. 28, 2024. (Hendrik Schmidt/dpa via AP)

BERLIN -

Volkswagen has informed employee representatives that it wants to close at least three plants in Germany, the head of the company's works council said Monday.

Employee council chief Daniela Cavallo said at a meeting with Volkswagen workers at the company's Wolfsburg headquarters that management also plans cuts at other sites, and pledged to resist the plans, German news agency dpa reported. She said that “all German VW plants are affected by these plans. None is safe."

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The company didn't give details of its plans. But chief personnel officer Gunnar Kilian said in a statement that “the fact is that the situation is serious and the responsibility of the negotiating partners is enormous,” dpa reported.

Volkswagen said in early September that auto industry headwinds mean it can’t rule out plant closures in its home country, and must drop a job protection pledge in force since 1994 that would have barred layoffs through 2029. CEO Oliver Blume cited new competitors entering European markets, Germany’s deteriorating position as a manufacturing location and the need to “act decisively.”

“Without comprehensive measures to restore competitiveness, we will not be able to afford significant future investments,” Kilian said Monday. He added that management will stick to the principle of discussing Volkswagen's future with its internal negotiating partners first.

Pay negotiations between Volkswagen and the union are due to resume on Wednesday.

European automakers are facing increased competition from inexpensive Chinese electric cars. Volkswagen said last month that the company’s half-year results indicated it would not achieve its target of 10 billion euros ($10.8 billion) in cost savings by 2026.

Volkswagen has some 120,000 employees in Germany, where it has 10 plants — six of them in the northern state of Lower Saxony, including Wolfsburg.

The IG Metall industrial union sharply criticized VW's reported closure plans. “We expect that, instead of cutback fantasies, sustainable concepts for the future be sketched out by Volkswagen and its management at the negotiating table,” regional union leader Thorsten Gröger said.