Volkswagen to close up to three factories in Germany

Works Council Chairwoman Daniela Cavallo has provided further details on the planned savings in the Volkswagen Group ahead of the next round of negotiations.

The Board of Management allegedly wants to close up to three plants, downsize all others, divest core areas, and implement massive salary cuts. This would also affect electric car production.

“This is not just saber-rattling as a tactic in the current round of in-house wage negotiations. The Management Board wants all this and believes there is no alternative,” a leaflet distributed to employees read.

The statements were also made at an information event organized by the works council. Cavallo is referring to cuts recently presented to the General Works Council. According to the head of the works council, “all German VW plants are affected by the plans”. If the plant is not closed, there will probably be other cuts. “None are safe!” Cavallo warns.

At the time, Volkswagen doesn’t want to comment on the alleged measures in detail. “The company’s proposals and plans will first be presented internally to the negotiating partners and then discussed,” a spokesperson told the German magazine Automobilwoche.

“VW is at a decisive point in its corporate history. The situation is serious, and the responsibility of the negotiating partners is enormous,” the spokesperson continued.

Three plants, also a larger one

The figure of three plants is indeed surprising. In September, the Board of Management counted German plants for the first time and calculated that sales of 500,000 vehicles would not be enough to fully utilize the factories.

“This corresponds to the production of two plants,” said VW CFO Arno Antlitz at a Works Council meeting. Now, there are three locations in question.

While it was previously assumed that smaller sites, such as the ‘Gläserne Manufaktur’ (the Glass Factory) in Dresden and the former Karmann plant in Osnabrück, were on the brink. Like the Audi Brussels plant, Osnabrück is currently without a model commitment from 2026.

A more prominent site would also be discussed if three plants are discussed. It is not known which one. However, this would also affect EV production.

The main plant in Wolfsburg will probably not be closed. The future importance of EVs also means that the Emden plants (ID.4 and ID.7, a purely electric car plant from 2025), the VWN factory in Hanover (ID. Buzz, among others), and the MEB plant in Zwickau (ID.3, ID.4, ID.5, Cupra Born and Audi Q4 e-tron) will probably remain. The component plants (Braunschweig, Salzgitter, Kassel, and Chemnitz) also supply eMobility components.

Jobs at risk everywhere, pay cuts all over

However, the Works Council also warns that jobs outside production are at risk. The company management wants to “relocate entire departments and areas abroad or outsource them,” they say. This is said to range from semi-skilled workers to academically qualified employees.

According to employee representatives, those who keep their jobs are threatened with a pay cut of at least 10%, and some speak of “around 20%.” The German newspaper Handelsblatt previously reported on the threat of pay cuts of 10%.

“Bonus payments in the highest pay scale group ‘Tarif Plus’ are also likely to be affected, as are bonus payments for employee anniversaries,” says the newspaper. Internally, these measures are said to have been compiled on a ‘poison list’. In addition to the across-the-board pay cut, zero rounds for 2025 and 2026 are also said to be on the list.

The ‘week of truth’?

There is talk of a ‘week of truth’ for Volkswagen. On Wednesday, the Group will present its business figures for the third quarter, which will likely be relatively modest following the profit warning a few weeks ago.

On the same day, negotiations with IG Metall in the next round of collective bargaining will also begin. While management is probably preparing the list of factories to be closed, the trade unionists are demanding a 7% wage increase for employees and more money for trainees. The Handelsblatt summarises the situation dryly: “It is unlikely that an agreement will be reached quickly.”

The unions say the workers now have to pay for management’s mistakes. “This is a knife in the heart of all these hard-working VW employees,” says Thorsten Gröger from IG Metall. “We want the VW top to come up with feasible concepts for the future instead of fantasies about decimation and demolition. Until now, we have heard nothing but hollow phrases.”

The German government is concerned and waiting for more clarity on the possible decisions. Nevertheless, it states that “the wrong decisions made in the past by the management can’t be blamed on the workers”. In Germany, the Volkswagen Group employs some 120,000 people.