Volkswagen last month canceled a 1994 agreement that protected its workers from layoffs until 2029, enabling business-related layoffs from mid-2025.
With sales in China declining almost 20 percent in the first half of 2024, Volkswagen — which is heavily invested in the Chinese market — is left with few options to make up for its monetary shortfall, making the plant closures an obvious target.
Volkswagen’s historic plant closures come as Germany’s gross domestic product is set to shrink for the second year in a row.
The country’s growing economic difficulties are likely to become a key issue ahead of a federal election scheduled less than a year from now.
German Chancellor Olaf Scholz, meanwhile, is preparing for an industry summit to be held at the chancellery on Tuesday, where he — together with labor union bosses and the chiefs of some of Germany’s biggest companies — is expected to come up with a plan to revamp the country’s economy.