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The cornerstone of German industry is the automotive industry

Volkswagen does not rule out plant closures and layoffs

Sep 4, 2024 09:21 276

The cornerstone of German industry is the automotive industry  - 1

German Vice Chancellor, Minister of Economy and Climate Protection Robert Habeck said that the automotive industry is the cornerstone of the German economy. He made the comments following reports that automaker Volkswagen is not ruling out plant closures and job cuts caused by production needs as part of the savings program adopted in 2023.

Major car manufacturers and their suppliers, according to the minister, are good employers for tens of thousands of employees, “engines of prosperity” in regions across the country and drivers of innovation outside the industry. “This applies even more to Volkswagen as the second largest car manufacturer, and the company has a big responsibility here,”, Habeck said. According to him, huge efforts are currently being made to transform the automotive industry in order to move to e-mobility. German car manufacturers will have to withstand this competition, concluded the minister.

On September 2, the DPA agency reported that Volkswagen is allowing plant closures and layoffs as part of the savings program adopted in 2023. From the board's point of view, a major restructuring of brands of the Volkswagen AG group. In addition, management believes that cost reduction objectives cannot be achieved through pre-planned job cuts through partial retirements and one-time payments. In this regard, management has decided to end the employment guarantees that have been included in employment contracts since 1994.

The head of the concern, Oliver Blume, justified the austerity course with the fact that the situation in the European car industry has recently become more complicated and that more and more new players are entering the European market. The savings program adopted by Volkswagen in 2023 aims to increase profits by 10 billion euros by 2026.