Volkswagen set to close three factories and cut jobs in major costs plan

Restructure includes 10% salary reduction for all staff and two-year pay freeze

The Volkswagen works council has outlined cost-cutting plans that threaten to reshape the brand’s operations in Germany.

In a meeting today, Daniela Cavallo, the chair of the Volkswagen works council, told workers the company’s board plans to shutter at least three of Volkswagen’s 10 German production facilities, while reducing capacity at the others, asserting: "None are safe!"

The closure of any plant would be a first for the VW brand in its 87-year history.

Together with the plant closures, the plans put forward by the Volkswagen board include significant workforce reductions, salary cuts and the outsourcing of various departments abroad, she said.

Cavallo highlighted the cost-cutting measures will affect all job categories, from skilled labor to management. She warned employees that "no one can feel secure in this situation."

With approximately 120,000 employees in Germany - about half of whom work at the main plant in Wolfsburg - Cavallo said the measures proposed by the Volkswagen board could lead to the loss of tens of thousands of jobs. She stated that the company's strategy appears aimed at "bleeding out" employment opportunities.

The proposed restructuring includes a 10% salary reduction for remaining employees, a pay freeze for the next two years and the elimination of the monthly tariff allowance of €167, resulting in an estimated total pay reduction of around 18%.

Cavallo delivered a stark warning to VW management: "Do not engage in conflict with us, the VW workforce. You are very close to escalation!"

Autocar has contacted VW for comment.