Germany’s Scholz urges VW to avoid factory closures

German Chancellor Olaf Scholz urged Volkswagen AG to reconsider plans to shut down factories, stressing the automaker’s responsibility to its workers and local communities. Speaking to the Funke media group, Scholz stated that plant closures “would not be the right way” to address challenges. However, he acknowledged that the ultimate decision rests with the company’s owners and labour representatives.

Scholz’s appeal comes at a critical time for VW, which is under mounting pressure as a second wave of warning strikes looms on Monday at its German plants. The strikes, organised by labour unions, aim to counter the automaker’s proposed cost-cutting measures, which include factory closures, thousands of job cuts, and 10 per cent wage reductions.

The automaker is grappling with weak demand in Europe and reduced competitiveness in China, the world’s largest auto market. These challenges have prompted management to consider drastic restructuring efforts.

Despite ongoing negotiations between VW executives, labour representatives, and owners, no resolution has been reached, leaving the company at a crossroads. Scholz’s comments highlight the growing scrutiny of Volkswagen’s decisions, as its future strategies could significantly impact Germany’s industrial and economic landscape.

Attribution: Bloomberg

Subediting: Y.Yasser