Volkswagen's Bold Restructuring: A Shake-Up in Germany's Automotive Powerhouse

Volkswagen is considering closing at least three factories in Germany, potentially laying off tens of thousands to restructure its business amidst competition and weakening demand. This move has sparked negotiations with unions and pressure on the German government, emphasizing the need for industry revitalization.

Volkswagen has announced plans to shutter at least three of its German factories and lay off tens of thousands of employees as it embarks on a significant restructuring initiative. This move comes amid efforts to cut costs and revamp operations in response to stiff competition and declining demand across Europe and Asia.

Daniela Cavallo, head of Volkswagen's works council, emphasized the gravity of the situation, urging for substantial restructuring and warning of potential talks cessation if demands are not taken seriously. As negotiations intensify, the German government faces mounting pressure to stimulate its struggling economy.

In response to high operational costs and decreased productivity, Volkswagen aims to implement at least a 10% salary reduction and a pay freeze in the coming years. The company's stock has experienced a notable decline, reflecting broader industry challenges such as looming EU tariffs on Chinese electric vehicles.

(With inputs from agencies.)