WOLFSBURG, Germany (Reuters) -Volkswagen plans to shut at least three factories in Germany, lay off tens of thousands of staff and shrink its remaining plants in Europe’s biggest economy as it plots a deeper-than-expected overhaul, the carmaker’s works council head said.
Europe’s biggest carmaker has been negotiating for weeks with unions over its plans to overhaul its business and lower costs, including considering plant closures in Germany for the first time.
“Management is absolutely serious about all this. This is not sabre-rattling in the collective bargaining round,” Daniela Cavallo, Volkswagen’s works council head, told several hundreds of employees in Wolfsburg on Monday.
“This is the plan of Germany’s largest industrial group to start the sell-off in its home country of Germany,” Cavallo added, not specifying which plants would be affected or how many of Volkswagen Group’s roughly 300,000 staff in Germany could be laid off.
The comments mark a major escalation of a conflict between Volkswagen’s workers and the group’s management, which is under severe pressure to cut costs and remain competitive in light of weaker demand from China and Europe.
They also heap further pressure on the German government to act on persistent weakness of its economy.
Cavallo said Berlin needed to urgently come up with a masterplan for German industry to ensure it does not “go down the drain”.
Cavallo said there was agreement between both sides regarding the nature of the problems the carmaker, and many of its European peers, faces, ranging from a slower-than-expected electric transition to fierce competition from Chinese carmakers entering Europe.
“We are not far apart when it comes to analysing the problems. But we are miles apart on the answers to them,” he said.
(Reporting by Axel Schmidt, Christina Amann and Christoph Steitz; editing by Matthias Williams and Susan Fenton)
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