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VW in crisis: shocking production cuts and factory closures!
Volkswagen is planning far-reaching cost-cutting measures in Wolfsburg and other locations to cope with cuts due to the switch to electric cars.
VW in crisis: shocking production cuts and factory closures!
Volkswagen is facing a crucial turning point that could affect not only the future of the company, but also thousands of jobs. Current information shows that the automotive giant has developed a drastic savings plan due to internal challenges. From December 2024, production capacities in several plants are to be severely restricted. This includes a “cross-off list” of various affected locations, such as news38 reported.
The affected factories are primarily in Wolfsburg, Osnabrück, Zwickau and the glass factory in Dresden. In Wolfsburg, a reduction of 500,000 units is expected, with maximum capacity at 800,000. However, only 523,000 vehicles were produced in 2024. The Osnabrück plant also plans to reduce production by 56,000 units, while in Zwickau a reduction of 170,000 units cannot be avoided. The future of the Transparent Factory in Dresden is also uncertain, as the technical capacity here is expected to decrease by 8,000 units.
Difficulties in production
The automotive group is faced with major challenges, especially in the transition to electromobility. Loud daily news factory utilization is low and costs rise. Around 70,000 employees currently work at the main location in Wolfsburg, almost 40,000 of them in administration. In order to get personnel costs under control, Volkswagen plans to cut 20% of administrative positions. The production of new electric models, such as the ID.3, is currently on hold due to a lack of demand.
Insecurity among employees is growing. Low capacity utilization in many plants, the cancellation of night shifts and a possible threat of plant closure are leading to a tense climate. Last but not least, the VW works council in Lower Saxony is strongly campaigning against possible site closures, which underlines the importance of Volkswagen in the region.
Market adjustment and future outlook
The challenge doesn't just lie with VW. The entire European automotive sector is under pressure. As the Zurich press reported, reduced demand and high investments in electric vehicles are problematic for many manufacturers. Volkswagen expects sales to fall by 500,000 vehicles, equivalent to the production capacity of at least two plants. “It is important to make these decisions now,” explained CEO Oliver Blume.
The closures could also pose political challenges for the federal government, especially after the election defeats. It remains to be seen how VW will cope with the upcoming changes and whether the company can adapt to the demands of competition, especially from cheaper electric cars from China. For Volkswagen, the next one or two years will be dominated by change.