According to the company, it plans to cancel an agreement in force since 1994 that excluded the execution of mandatory layoffs until the end of 2029, since the Volkswagen brand, the main one of the consortium, must be comprehensively restructured.

According to the multinational, efforts to reduce the workforce through early retirement models and voluntary severance pay will not be sufficient to meet the company’s savings objectives.

“In the current situation, the closure of vehicle and component production plants cannot be ruled out if quick measures are not taken,” said VW, while union leaders declared they will fight a merciless battle against the cutback plans.

According to the German news agency DPA, union representatives described the move as an “attack on employment, jobs and collective agreements.”

A difficult economic environment, new competitors in Europe and the declining competitiveness of the German economy mean that the carmaker needs to make efforts, the group’s chief executive Oliver Blume said in a statement to his executives.

By the end of 2023, Volkswagen, Europe’s largest carmaker, announced it intends to reduce its costs by 2026 by at least 10 billion euros.

ef/ro/mjm