Grapevine

Volkswagen mulls plant closures and job cuts in Germany

German automotive giant Volkswagen said Monday it could take the unprecedented move to close production sites in Germany and threatened further job cuts as its savings plans stalled.

Rising costs at the carmaker were cutting into profits, leaving Volkswagen facing "particularly significant challenges", the group said in an internal memo seen by AFP.

"In the current situation, even plant closures at vehicle production and component sites can no longer be ruled out," Volkswagen said in the note sent to employees.

Unions and government officials responded with alarm to the idea of plant closures in the group's home market, a decision never before taken by Volkswagen.

The announcement by one of Germany's blue-chip companies adds to concerns for Chancellor Olaf Scholz after the domestic economy has struggled in recent months.