Austerity: Volkswagen says plant closures, job cuts possible to cut cost

Auto giant Volkswagen is no longer ruling out plant closures and compulsory redundancies in Germany as part of its cost-cutting programme at the core VW brand, the company announced on Monday.

Management at VW said they would be cancelling a long-standing agreement with labour in Germany that ruled out compulsory redundancies through the end of 2029. The deal has been in place since 1994.

The company said that executives believe the VW brand must be comprehensively restructured and current efforts to reduce the workforce through earlier retirement packages and voluntary severance payments won’t be enough to meet savings targets.

“Even closures of vehicle production and component plants can no longer be ruled out in the current situation without rapid countermeasures,” VW announced.

Labour leaders at VW said they would wage an all-out battle against the plans.

Daniela Cavalla, who leads the works council at VW, called the plans “an attack on our employment, workplaces and collective bargaining agreements” in a special issue of the works council’s newspaper, Mitbestimmen, which was obtained by dpa.

“This puts VW itself and therefore the heart of the [Volkswagen] Group in question. We will fiercely defend ourselves against this,” Cavallo wrote to workers. “With me, there will be no VW site closures!”