Volkswagen mulls closing German plants, a first in history

German auto giant Volkswagen said it could close some plants in the country, a first in its 87-year history, as part of its $11.1 billion cost-cutting measure to help navigate an increasingly challenging economic environment.

Volkswagen CEO Oliver Blume emphasized that the company must take decisive action due to Germany’s declining competitiveness as a manufacturing location.

The company also announced plans to end its 1994 employment protection agreement, which has sparked intense criticism from trade unions, including IG Metall, the top German industrial union.

The union condemned the plan as a “massive threat” to auto jobs.

The move comes as the German carmaker loses market share in China, where local EV brands like BYD are gaining ground. The auto giant reported a significant drop in operating profits in the first half of the year.

Despite the turmoil, Volkswagen shares rose slightly by 1.25% on Monday.