Volkswagen mulls closing factories in Germany for the first time and cutting thousands of jobs to reduce costs

• Volkswagen plans to adjacent factories successful Germany for nan first time, a apical national charismatic said.
• The German carmaker is nether aggravated unit to trim costs amid sliding income successful China.
• VW has struggled to compete pinch Chinese EV giants specified arsenic BYD that are now expanding into Europe.

Volkswagen is readying to adjacent factories successful Germany for nan first clip and trim tens of thousands of jobs, nan automaker's apical national charismatic said.

Daniela Cavallo, caput of Volkswagen's wide useful council, told labor that nan institution was mulling nan closure of astatine slightest 3 German plants amid aggravated unit to trim costs pursuing sliding income and profits.

Cavallo besides said Volkswagen besides planned to trim salaries by 10%, frost wages for 2 years, and trim nan size of nan company's remaining plants successful Germany, wherever it has astir 300,000 workers.

Volkswagen did not instantly respond to a petition for comment.

The plans, if enacted, are apt to trigger a bitter conflict betwixt unions and Germany's largest automaker. Unions play a adjacent domiciled successful astir companies successful Europe's biggest economy, and person representatives connected nan board.

VW issued its second profit informing successful 3 months successful September.

The institution has mislaid marketplace stock successful China to local rivals trading cheaper EVs and hybrids, and now faces nan imaginable of competing pinch the likes of BYD arsenic they grow into Europe.

Volkswagen is besides grappling pinch lackluster request successful Europe. Germany-based automotive expert Matthias Schmidt told Business Insider nan institution had been deed by nan nonaccomplishment of nan European car marketplace to prime up arsenic quickly arsenic hoped pursuing nan pandemic.

"That is causing an over-capacity and under-utilization problem starring to nan request for restructuring crossed European operations," said Schmidt, who added that VW's European marketplace stock was besides nether unit from Tesla and Chinese automakers.

Many of Volkswagen's European rivals are besides encountering akin problems arsenic they grapple pinch slowing request for EVs successful Europe and rising title abroad.

BMW and Mercedes-Benz, arsenic good arsenic Italian rival Stellantis, person each issued profit warnings successful caller weeks, pinch experts telling BI that a deficiency of affordable options was putting consumers disconnected EVs.