Volkswagen Faces Unprecedented Factory Closures Amid Rising Asian Competition

Volkswagen is under significant pressure from Asian competitors, leading the company to consider closing factories in Germany for the first time. This move has caused tension between CEO Oliver Blume and the powerful unions at VW. The company aims to save 10 billion euros by 2026 through extensive cost-cutting measures.

Volkswagen is contemplating the closure of factories in Germany, a historic move underscoring the fierce competition from Asian carmakers. The decision represents a crucial challenge for CEO Oliver Blume, known for his consensus-building approach, as he grapples with powerful unions poised for 'fierce resistance.'

The company has identified a major vehicle plant and a component factory as being potentially obsolete, according to its works council. Specific locations like Osnabrueck and Dresden have been suggested as targets for closure. Lower Saxony, Volkswagen's second-largest shareholder, has backed the review process.

Volkswagen has also indicated an end to its long-standing job security programme, which has been protecting jobs until 2029. Thomas Schaefer, VW brand chief, remarked on the extremely tense situation, noting that simple cost-cutting measures won't suffice.

(With inputs from agencies.)