According to a report on September 3 by Kuaikeji, Volkswagen is considering closing an automotive factory and a parts factory in Germany as part of its cost-cutting measures, according to media reports.

Oliver Blume, CEO of Volkswagen Group, said that the European automotive industry is facing a very demanding and severe situation. New competitors are entering the European market. Additionally, Germany, as a manufacturing hub, is falling further behind in terms of competitiveness.

Globally, Volkswagen boasts a loyal workforce of approximately 650,000 employees, with nearly half, or 300,000, located in Germany, highlighting its strong roots and influence in the local market.

However, making such a decision is not easy, especially considering the unique internal governance structure of Volkswagen. In the Supervisory Board, trade union representatives occupy half of the seats, while the government of Lower Saxony, as a significant shareholder with a 20% stake, often maintains close cooperation with trade unions, adding complexity and sensitivity to the reform efforts.

Therefore, if the decision to close factories is implemented, it will mark the first time in Volkswagen's 87-year history that it takes such a radical measure in Germany, undoubtedly triggering direct dialogue and negotiation with the powerful German trade unions.

Volkswagen Group's half-year financial report for 2024, released in early August, revealed a steady increase in sales revenue to €158.8 billion, slightly higher than the same period last year. While operating profit reached €10.1 billion, a decrease of 11% year-on-year, the operating margin remained stable at 6.3%, demonstrating the company's unwavering commitment to balancing growth and profitability amidst adversity. Behind these figures lies Volkswagen Group's relentless efforts to continuously deepen product mix adjustments, strengthen cost control, and drive electrification and intelligent transformation.