FRANKFURT, Germany — Volkswagen has stated that current challenges in the auto industry could result in potential plant closures in Germany and the end of a long-standing job protection agreement that has been in place since 1994, which would have prevented layoffs until 2029.
“The European automotive industry is facing a very demanding and serious situation,” Volkswagen Group CEO Oliver Blume said in a statement on September 2. He cited increased competition in the European market, Germany’s declining position as a manufacturing base, and the need for decisive measures.
Thomas Schaefer, CEO of Volkswagen Passenger Cars, noted that while efforts to reduce costs have shown results, the challenges have grown significantly. European automakers are facing more competition from lower-priced Chinese electric vehicles. The company also reported that its half-year financial results suggest it will not meet its target of saving 10 billion euros by 2026.