WOLFSBURG (dpa-AFX) - German auto giant Volkswagen Monday warned that it is considering closing two factories in the country, to curb costs.
The Wolfsburg-based manufacturer informed its works council, which represents employees, that it was looking to close 'at least one larger vehicle manufacturing plant and one component factory in Germany' to save billions of euros in expenses.
Volkswagen Group CEO Oliver Blume stated in a written statement, 'The European automotive industry is facing a very demanding and serious situation. The economic environment has become even more challenging, and new competitors are entering the European market. Additionally, Germany, as a manufacturing hub, is falling further behind in terms of competitiveness.'
Volkswagen indicated that its various brands would require a 'comprehensive restructuring.' The company added that the current situation has escalated to the point where plant closures at vehicle production and component sites can no longer be ruled out.
VW brand CEO Thomas Schafer reinforced this by saying, 'The situation is extremely tense and cannot be resolved through simple cost-cutting measures. Therefore, we intend to start discussions with employee representatives as soon as possible to explore options for sustainably restructuring the brand.'
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