In a historic first, Volkswagen may close factories

Volkswagen, Germany’s largest employer, may close three factories amid declining sales and fierce competition from Chinese automakers, marking the first such closures in its 87-year history.

The automaker announced a major restructuring that also included mass layoffs.

The restructuring stems from high labor costs and a drop in car sales since the pandemic.

Daniela Cavallo, head of the works council, announced that management plans to downsize remaining plants, divest core divisions and implement significant pay cuts for employees.

The company is currently engaged in wage negotiations with the IG Metall union, which seeks a 7% pay increase, reflecting ongoing employee concerns over job security and the uncertain future of their positions. The workers have threatened to walk off their jobs if a deal isn’t reached by December.