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Ailing auto giant Volkswagen plans to close at least three factories in Germany and slash tens of thousands of jobs as part of drastic cost-savings drive, workers’ representatives said Monday, calling the proposed cuts “of historic dimensions”.
The plan laid out by management, which affects the namesake VW brand, also includes a 10-percent pay cut for all staff, the company’s powerful works council said in an update to staff.
Bosses also want to downsize remaining plants and move “entire departments” abroad or outsource them completely, the statement added as thousands of workers assembled for meetings at the company’s plants nationwide.
There was no immediate comment from Volkswagen bosses, with a spokesman citing the “confidential” nature of the talks with unions and the works council.
The financial daily Handelsblatt had earlier reported that VW was seeking around four billion euros ($4.3 billion) in savings, including through plants closures, pay cuts and bonus reductions.
Factory closures in Germany would be a first in the company’s 87-year history.
“Volkswagen is shocking its workforce” with cost-cutting plans “of historic dimensions”, the works council said in the statement after informing employees in all 10 German plants of the proposals.
“This is the plan of Germany’s largest industrial group to start the sell-off in its home country,” Daniela Cavallo, head of the works council, told staff at VW’s Wolfsburg headquarters.
“It is a firm intention to bleed dry the regions where the plants are located,” she said. “And it is the clear intention to send tens of thousands of Volkswagen employees into mass unemployment.”
The 10-brand Volkswagen group employs more than 680,000 people globally, around 120,000 of whom work at the core VW brand in Germany.
Volkswagen stunned employees in September when it said it was in need of a deep restructuring and was considering significant job cuts as well as shuttering plants on its home turf.
VW argues the cuts are necessary as it struggles with high production costs, a stuttering switch to electric vehicles and rising competition in key market China.
Rival carmakers in Germany’s flagship industry are facing similar headwinds, contributing to a wider downturn in Europe’s largest economy.
In Berlin, the government cautioned against a mass jobs cull at Volkswagen.
Chancellor Olaf Scholz’s position was that “possible wrong management decisions from the past must not be at the expense of the employees”, spokesman Wolfgang Buechner said, adding that the focus should be on “preserving and securing jobs”.