October 17, 2024 – In a significant development on Tuesday, four German federal states – Lower Saxony, Saxony, Hesse, and Berlin – have vociferously opposed the closure of Volkswagen factories and layoffs within their jurisdictions, according to Eurasia Daily. A jointly signed document by the states’ economic ministers stated, “All factories must remain fully intact.”
Moreover, these states have expressed their opposition to competition among automakers and local austerity measures that come at the expense of employees’ well-being. They have proposed the signing of contracts that safeguard employment and income.
In a document signed on October 10, the aforementioned states declared, “This implies that there will be no competition among factories.” The document further revealed, “The economic departments of the German federal states will unite and collaborate closely.” These four states have also rejected mass layoffs that compromise employees’ interests and stated that renewed long-term job security contracts should ensure job retention and the preservation of skilled workers.
Volkswagen is potentially facing the unprecedented situation of shutting down its German factories and laying off tens of thousands of employees to navigate the current crisis. The automaker’s management has indicated that to narrow the gap with competitors, the company needs to save an additional €4 billion and has not ruled out the possibility of factory closures and layoffs.
Volkswagen is currently grappling with a sluggish auto sales landscape, with its net profit declining by 14% in the first half of this year. Globally, the Volkswagen Group’s third-quarter sales fell by 7.1% to 2,176,300 units; battery electric vehicle (BEV) sales dropped by 9.8% to 189,400 units; and sales in China declined by 15% to 711,500 units.
