Food And Cost, Volkswagen Plans To Close One Of Its Leading Factories In Germany

Volkswagen ID.3 (Doc. Volkswagen AG)

JAKARTA - One of the world's largest automotive manufacturers, Volkswagen (VW) is considering closing its 87-year-old German plant. This is done to reduce costs amid competition from China's electric vehicle brand (EV).

Launching from CNN International, Tuesday, September 3, the vehicle manufacturer stated that they would not rule out the factory's closure. In addition, another step taken to maintain the company's future is to try to end a labor protection agreement with a union, which has been in effect since 1994.

Volkswagen Group CEO Oliver Blume, insists that the automotive industry in Europe is in a serious situation so that his party can make a decision to catch up with brands from the bamboo curtain country as soon as possible.

The economic curvature is becoming more difficult, and competitors are just starting to enter the European market. Germany, especially as a manufacturing location, is increasingly lagging behind in terms of competitiveness," Blume said.

At the end of last year, VW began efforts to cut costs by 10 billion euros and lost its largest share, China. In the first half of 2024, car shipments to customers in the bamboo curtain country decreased 7 percent compared to last year in the same period.

The sluggish performance in the country is also due to losing to competing with local brands such as BYD, which also pose a serious threat to its business on the blue continent.

Blume also said that the main step it took was cutting costs to be followed by another step.

We have taken all the necessary organizational steps. And now it's a matter of costs, costs and costs, "said Blume.

Tentu langkah ini akan mendapat penolakan dari perwakilan pekerja, yang memegang hampir setengah kursi di dewan pengawas perusahaan dan badan yang menunjuk manajer eksekutif.

However, Volkswagen Passenger Cars CEO Thomas Schaefer said that his party would soon start talks with employee representatives to explore the possibility of sustainable brand restructuring.

"The situation is very tense and cannot be resolved through simple cost cuts," he said.

Currently, Volkswagen has employed nearly 683,000 workers worldwide with about 295,000 of them from Germany.