The German government intends to prevent domestic plant closures at Volkswagen, Europe’s largest carmaker, although officials stressed that the final decision rests with the company.
Facing increasing pressure from Chinese competitors, U.S. tariffs, and weakening demand across Europe, Volkswagen is reportedly considering closing four factories in Germany and increasing planned job cuts to as many as 100,000 employees, according to sources familiar with the matter.
Factory closures at one of Germany’s largest industrial companies would further challenge the government’s efforts to revive the country’s sluggish economy and improve public confidence.
“Our aim is to prevent the closure of sites in Germany,” a government spokesperson said.
“To achieve this, the right framework conditions must be established, including competitive mechanisms and incentives that ensure these production sites remain profitable.”
The spokesperson emphasized that such decisions ultimately remain commercial decisions to be made by the company.
Volkswagen’s restructuring plans, which have not yet been officially announced, are expected to face strong opposition from labor unions and the State of Lower Saxony, the company’s second-largest shareholder.
The German federal government does not hold a direct ownership stake in Volkswagen.
The proposals are expected to be discussed during the Supervisory Board meeting on July 9, which includes employee representatives.
According to a Works Council note, company management believes the previously agreed workforce reductions are insufficient, with additional job cuts still under evaluation.
