The once lucrative car market is now bitterly competitive, and the global triumph of China’s electric vehicles is further squeezing the sales of local manufacturers.
In its 87-year history, Volkswagen has not yet closed a single factory in Germany. However, this car manufacturer is now considering closing three factories and cutting workers’ wages by 10 percent.
The plans were revealed at a staff meeting by the chairman of VW’s influential works council, but have yet to be confirmed by the company itself – which released its third-quarter results on Wednesday.
VW, the world’s second-biggest carmaker, which also owns Audi, Škoda and Seat, has already issued two profit warnings this year and hinted at the possibility of closing some factories in Germany that would have previously seemed unthinkable.
It is not the only European carmaker considering large and unpopular cuts. Stellantis – the owner of Opel, Fiat and Peugeot in Europe – is under intense pressure from Italian politicians and unions to keep its oldest Fiat factory in Turin operating despite falling sales.
Assembly lines in France are already being moved to cheaper locations such as Morocco and Turkey. In mid-October, hundreds of French workers, including those from Bosch and other suppliers, protested outside the gates of the Paris Motor Show.
The European car industry, which employs nearly 14 million people and accounts for 7 percent of the EU’s GDP, is facing a perfect storm. Demand for cars is falling both at home and abroad, while automakers face a risky and costly years-long transition from internal combustion engines to electric powertrains.
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Source: www.aripaev.ee
