These 3 Volkswagen factories are at risk of closure

The problems they afflict Volkswagen they have been going on for some time and now some issues seem to have come to a head. According to what was reported by Automotive News Europe and Bloomberg News, the Group’s top management would have identified the 3 German factories to close or sell.

The list would include the former factory Karmann di Osnabrückthe famous – and unfortunate – “Glass factory” of Dresden and the Emden plant. The first two factories will be closed or sold, while the third will work for third parties.

Showdown

The rumors arrive one day before the new round of negotiations between the Volkswagen Group and IG Metall – the German metalworkers union – together with the cost cutting proposal presented by Daniela Cavallo, director of the General Works Council of Volkswagen. According to what was reported by Automobilwoche, the requests concern a substantial salary cuts for management and the Board of Management, along with a lower-than-expected dividend for all shareholders, including the Porsche family. Furthermore, the cost of labor must be reduced by 1.5 billion euros and the closure of plants must be avoided.

The rumors about the probable ones closures of 3 German factories by Volkswagen follows a few hours after the announcement of 4,000 job cuts in Europe by Ford. A measure that will mainly concern England and Germany.

The situation

A crisis, that of Volkswagen, which originates primarily in the electric strategy and the lack of success on the Chinese market.

Interesting in this context are the statements released by the main executives of the Group in the spring of 2024, on the occasion of the presentation of the 2023 budget. The CEO Oliver Blume he had stated

“In 2023 we have created a good foundation. We know what we are doing and are approaching everything consistently to realize the enormous potential of the Volkswagen Group. Thanks to inspiring products, a coherent strategy and a clear focus on implementation, we look forward to the future with confidence. ‘financial year 2024. The Volkswagen Group is entering the long-range race of transformation from a position of strength.”

CFO Arno Antlitz added

“In a difficult environment, the Volkswagen Group achieved solid results in 2023. This year we want to continue on this path. To ensure long-term success, in 2024 we will focus on bringing new vehicles into operation, reducing costs, on greater use of synergies within the Group and on achieving a stronger regional position, including through continued profitable growth in North America.”

Looking at the 2023 results the Volkswagen Passenger Cars brand delivered 4.9 million vehicles worldwide, 6.7 percent more than the previous year. The greater growth they were recorded mainly in Western Europe (+14.7%), North America (+17.0%) and South America (+15.9%).

Also turnover increased (+17.1%) for a total of 86.4 billion euros while operating profit improved to 3.5 billion euros. Thanks to the increase in volumes and prices, together with the reduction in fixed costs.

And January to September 2024 instead the VW brand has registered a drop in deliveries globally by 2.5%, with a drop in China (at Group level) of 10%, where however electric models grew by 26.5%, while falling by 14% in Europe. In total, 148,100 EVs were sold, representing a particularly low percentage of the total.