Volkswagen Guncang Crisis, Many Factories Threatened To Close

On August 28, Brazil's Volkswagen invested in three factories in Sao Paulo, aimed at launching 16 new vehicles by 2028, focusing on the arrival of hybrid vehicles. (Doc. Volkswagen Brasil)

JAKARTA - Germany is a country known for its industrial greatness, especially automotive, now facing the toughest test. Their success so far, which relies on close collaboration between employers, trade unions, and governments, is in danger of collapsing.

The cause? Loss of access to cheap energy from Russia, uncertainty of trade relations with China, and now, the potential destruction of relations with workers that has been characteristic, Reuters reported in the middle of last week.

Volkswagen, one of Germany's largest automakers, is now considering drastic steps to deal with its financial situation.

In an interview with the Bild am Sonntag newspaper, and quoted by Reuters, September 8, Volkswagen CEO Oliver Blume stated that the "cake" of the European market is shrinking while the "guests" enjoying it are increasing. Blume explained, "car sales in Europe are declining, while at the same time, new competitors from Asia are aggressively entering this market."

This statement is accompanied by a massive restructuring plan. Volkswagen is reportedly considering the closure of a factory in Germany, a move they have never taken before. Not only that, job guarantees in six other factories are also in danger of being revoked. This step was taken to support a cost-saving program worth 10 billion euros (around Rp172 trillion).

This decision certainly raises concerns. The closure of factories and the loss of job guarantees could have a negative impact on the German economy, especially the automotive industry sector.

It is not certain which factories are in danger of being closed. However, this news is a strong signal that Volkswagen is facing tough challenges. Will this restructuring step be able to save the European auto giant?

Meanwhile, The Guardian reported, September 8, what happened in Volkswagen is likened to a "big earthquake". As Germany's largest automotive producer, the VW crisis is seen as a national problem because it has never existed before for its workers to receive threats like this in their own country.

In fact, the "Earthquake in Volkswagen" made headlines in Wolfsburger Nachrichten, a newspaper circulating in cities in North Germany identical to automakers.