But this will not be the only decision in this sense, as the giant will also cut salaries by 10% to cushion the blow to sales and profitability.
Volkswagen, the largest car manufacturer in Europe and with a large one presence in Euskal Herriahas announced this will close at least three factories in Germany to reduce costs and increase profitability in a very complicated context. Moreover, the company has reported that this is also the case will reduce costs at the other seven factories in the country with a 10% reduction in salaries of your template.
Volkswagen announced this to the works council on Monday. Daniela Cavallo, head of the companies committee and member of the supervisory board, has indicated that she does not currently know which companies will be closed and how many people will be affected by this adjustment.
The German government has expressed concern about the company’s crisis but has not detailed what measures will be taken, although it has indicated that it is “paying attention” to the events.
Volkswagen had already announced the historic decision to close a factory on German soil at the beginning of September, the first decision of this type in 87 years of history. Despite all this, it remained a simple plan that had not landed. Now the official announcement is much stricter than it initially seemed, because it is not about a single plant, but about a large-scale cut.
Germany has a dozen factories in the country that support the jobs of almost 300,000 workers. Therefore, this decision could have major consequences for employees.
Message of peace from Volkswagen Navarra
The Volkswagen plant in Landaben has stated that it is “calm” about the announcement, as the works council has confirmed to Euskadi Irratia that they do not believe any of this will impact their business.
The crisis that Volkswagen is experiencing is not an ongoing one
Volkswagen has serious internal problems. The German giant cannot find a way out of a protracted crisis since the past two yearsbut that is now being noticed. Europe’s largest carmaker has been implementing a cost adjustment plan for a year that is not enough to offset the company’s sales losses.
Volkswagen’s crisis comes after intense competition from Chinese models, which was accompanied by a drop in demand. This combination of factors, combined with higher costs and the path to the transition to electric cars, results in a true moment of high tension for the entire sector.
These structural problems have mixed with technical problems at other companies such as Mercedes or BMW, causing double-digit stock market declines in many of these values between the current problems and the crisis in their business model.
Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
