News broke Monday that Volkswagen is considering plant closures in Germany. The auto giant faces falling profits due to slowing sales in China and other major markets. This development comes as Europe’s largest economy teeters on the verge of recession after reporting a slight contraction in second-quarter growth. Earlier this summer, VW’s Audi revealed a billion-dollar investment in Mexico, as the company’s future manufacturing could be overseas in the Americas.
Several financial outlets are reporting VW’s potential factory closure plan, including Bloomberg, which said, “VW is considering unprecedented factory closures in Germany in a bid for deeper cutbacks, delivering another blow to Chancellor Olaf Scholz’s government.”
“The economic environment has become even tougher and new players are pushing into Europe,” VW CEO Oliver Blume wrote in a statement, adding, “Germany as a business location is falling further behind in terms of competitiveness.”
Bloomberg noted, “Any shutdowns would mark the first closures in Germany during the company’s 87-year history, setting VW up for a clash with powerful unions.”
any on cheap NatGas wasn’t such a great idea as Europe’s top economic powerhouse becomes less competitive. This only suggests increasing deindustrial risks, loss of jobs, and more socio-economic discontent across the bloc.
