Volkswagen Contemplates Plant Closures Amid Cost-Cutting Drive

Volkswagen announced potential plant closures in Germany as part of a cost-cutting drive to save billions of euros. Amidst a challenging economic environment and increased competition, VW aims to streamline its operations in the transition to electric vehicles. The move has faced stern opposition from the company's works council.

Volkswagen could potentially close plants in Germany as it looks for ways to save several billion euros, the carmaker announced on Monday. One large vehicle plant and one component factory are considered outdated by Volkswagen, sparking fierce opposition from the works council.

The company is also considering ending its job security programme, in place since 1994, that prevents job cuts until 2029. Volkswagen brand chief Thomas Schaefer emphasized that the situation is dire and cannot be resolved by simple cost-cutting measures alone.

Facing a challenging economic environment and growing competition, Volkswagen is targeting 10 billion euros in savings by 2026 in its bid to transition to electric vehicles. Criticism from German union IG Metall and the company's own works council has highlighted the internal opposition to the plan. ($1 = 0.9034 euros)

(With inputs from agencies.)