Volkswagen Considers Closing German Factories Amid Cost-Cutting Efforts

German automaker Volkswagen is exploring the possibility of closing factories in its home country, potentially reneging on its promise to maintain staff levels until 2030, according to a report by the Financial Times.

The company’s CEO, Thomas Schaefer, has acknowledged that its cost-cutting program, launched last year, has fallen short of its target by several billion euros, resulting in significant losses for the company, as stated by board chairman Daniela Cavallo in a message to employees.

The report quotes the company as saying that the board is now reassessing its German plants, internal collective wage agreements, and job retention program, which is set to expire at the end of 2029.

In Germany, works councils play a crucial role in protecting employees’ interests and participating in the decision-making process of large companies, including Volkswagen.