German carmaker warns of stagnation in the European sector amid news of deeper-than-expected action

The German carmaker Volkswagen is planning to shut at least three factories in its home country, lay off thousands of workers and cut pay by 10%, according to the company’s union.

The deeper-than-expected cuts come as the company faces weak sales and slow expansion in the electric vehicle (EV) sector amid tough competition from Chinese manufacturers.

“The board wants to close at least three factories in Germany,” the works council chief, Daniela Cavallo, told employees at VW’s headquarters in Wolfsburg on Monday. Its remaining manufacturing sites will reduce capacity, she said, citing information provided by management.

As Europe’s top economy suffers a crisis in manufacturing and fears of mass unemployment, VW is aiming for a fundamental restructuring to cut costs. It had initially warned last month that it had the equivalent of two factories of extra capacity in Germany.

  • Ekybio@lemmy.world
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    2 months ago

    Some context from someone who lives in germany:

    VW has for quite a while now failed to read the writing on the wall and join in on the growing market for electronic cars. All the while getting subsidies from the german government.

    Now they cant compete anymore and even their regular cars are way to expensive for a lot of germans to buy. And the chinese manufacturers are pushing them even further out of a market they failed to enter by refusing to innovate years ago.

    A lot of this reads over here like hostage taking: They want more subsidies for their failing company model, or they leave the country.

    • RubberDuck@lemmy.world
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      2 months ago

      Failing to read the market… or shareholders wanting dividends rather than invest it in the companies future?

      Alternatively, the German government nationalizes VW to keep the jobs, fires upper management and replace them with people that get the orders to make cheap/affordable EVs for the masses.

      Fuck the shareholders.

    • Zerlyna@lemmy.world
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      2 months ago

      Their plant in Chattanooga TN started making EV’s in 2022. My dad retired from VW and keeps tabs. In his opinion they still aren’t selling well.

      • brucethemoose@lemmy.world
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        2 months ago

        They’re all mega expensive, arent’ they?

        I feel like a huge mistake is making heavy, mega luxury EVs instead of pushing smaller-battery cars with a tiny (I’m talking like 2hp) backup generator.

        • Zerlyna@lemmy.world
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          2 months ago

          $40,000 for ID4. I don’t know if that currently qualifies for the government rebates.

      • BreadstickNinja@lemmy.world
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        2 months ago

        The problem is the Chinese market, which has been a huge market for VW. That’s where they failed to come up with a viable competitor to the cheap EVs that are selling like hotcakes in China. Yes, the U.S. sales have been lackluster but that’s not what is driving VW’s woes. The U.S. is a relatively small market for VW.

    • brrt@sh.itjust.works
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      2 months ago

      I wonder where I’ve heard that before but I have NO fucKIng ideA. (I’m just being cryptic for fun)

    • Strider@lemmy.world
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      2 months ago

      Also, well, they illegally lied to us. Now being surprised (Pikachu face) I bought a Chinese car, I can have that for cheap.