Volkswagen to Close Plants in Germany for the First Time in 87 Years

For the first time in its 87-year history, German automaker Volkswagen has announced its intention to close plants in Germany and cut staff. The management explains this by the deteriorating economic situation.

This was reported by Bloomberg with reference to the company's statement.

As noted in the statement, Volkswagen AG is considering unprecedented plant closures in Germany, establishing a confrontation with powerful trade unions, as ‘the country's most important industry is fighting for its future.’

The company noted that the potential closure measures also include an attempt to end the company's 30-year agreement with employees to preserve jobs.

The agency's journalists stressed that Volkswagen's main target is the passenger car brand, whose profits are rapidly declining amid the transition to electric vehicles and slowing consumer spending.

CEO Oliver Blume said that Germany is increasingly lagging behind in terms of competitiveness as a business location. He emphasised that the economic situation has deteriorated again.

‘The economic environment has become even tougher, and new players are entering Europe. Germany as a business location is falling further behind in terms of competitiveness,’ he said.

The journalists added that the company currently employs 673,000 people, and the management plans to lay off up to 110,000 employees in the coming years.

It was recently reported that sales of electric vehicles in Norway set a new world record: 94% of new cars purchased by the country's residents in August were electric.

Meanwhile, sales of electric vehicles in Germany fell by 37% in July compared to last year, continuing the trend of a general decline in the popularity of this type of transport.