Volkswagen to press on with German plant closures - report

Volkswagen's management team is looking to press through with a plan to close four plants in Germany despite opposition from unions and local government officials. 

Wirstschafts Woche has read a 147-page report prepared at the behest of Volkswagen's management team for an upcoming meeting of the supervisory board. Half of the supervisory board's members are made up workers' representatives.

The report claims "the existing business models and structures are no longer sufficient to ensure the long-term competitiveness and profitability of the Volkswagen Group", and that comprehensive restructuring is required to stabilise the automaker's  "credit rating, and the associated capital and refinancing costs".

A core part of the company's transformation includes closing four plants, with Emden and Zwickau earmarked to cease vehicle production in 2031, Hanover slated to close in 2032, and Audi's Neckarsulm factory to shut in 2034.

Under an earlier agreement with its unions, the Volkswagen Group agreed it wouldn't close any German plants before the end of the decade.

Zwickau currently produces a clutch of electric vehicles -- Volkswagen ID.3, ID.4 (soon to be replaced by the ID. Tiguan), ID.5, Cupra Born, and Audi Q4 e-tron -- all of which use the MEB platform.

According to the German business publication, the next-generation ID. Tiguan will be moved to Skoda's Mladá Boleslav factory in Czechia, and Audi Q4 e-tron will be relocated to Volkswagen's factory in Bratislava, Slovakia.

The ID. Buzz and 'T7' Multivan are made at the Volkswagen Commercial Vehicles plant in Hanover. Once it's shut, production of the 'T8' people mover range will be transferred to Poznań, Poland.

Audi's factory in Necksarsulm is responsible for two core models, the A5 and A6, as well as the soon-to-be-retired A8. When the plant is mothballed, the A8's successor will be moved to Porsche's plant in Leipzig.

Emden currently makes the ID.4 and ID.7, and it's unknown what, if anything, will happen with the latter.

Union leaders and politicians have reacted with dismay to the article series being run by Wirstschafts Woche detailing the Volkswagen report.

Mario Albert, chairman of the works council at the Zwickau factory, told the business publication: "We will fight together for the future of our locations. It's clear that the board of directors is still committed to potential plant closures, but it's equally clear that they won't be making that decision alone."

Carsten Michaelis, Saxony's district administrator, said the report hit the "entire region with full force" and its contents seemed to contradict the impression Volkswagen CEO Oliver Blume gave last week when he visited the area.

Michael Kretschmer, Saxony's minister-president, called the report "very distressing", but also made an appeal for calm, noting Volkswagen's supervisory board won't be making any decisions on this matter when it meets on Friday and that the Zwickau plant is the company's "most efficient".

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