Dark clouds over the historic German car industry, which for the first time in its history is considering closing factories in Germany. The opposition reacts.
Response from Berlin
The automobile industry-its symbol Germanyh Volkswagenis experiencing a new deep crisis, the worst since the “Dieselgate” scandal of international proportions in the previous years, as its top executives report in German media.
After years of severe financial turmoil and under the weight of fierce competition from China, VW announced on Monday that the restructuring measures it is considering include closing its factories, which are located in Germany.
It is the first time such a possibility has been raised in VW’s 87-year history. It is also the first time in 30 years that the German giant is also considering the possibility of mass layoffs, although its workers are subject to a special protection regime.
According to analysts with deep knowledge of the German car industry, the first plant on the list of candidates to be locked up is in Zwickau. In fact, it is the first European automotive factory to manufacture e-autos. Last year it managed to build only 220,000 vehicles out of the 360,000 it planned, and this year’s forecasts look even more ominous.
“The developments at VW show the reality”
The news of possible VW factory closures is also causing political reactions, with the head of the official opposition and Christian Democrat president Friedrich Merz speaking of another resounding bell towards co-government under Chancellor Olaf Solz.
“Germany is no longer as counterproductive as it needs to be,” he commented at a party event in Osnabrieck. For Mertz, the serious developments in the German giant, which is essentially entering a restructuring phase, as he says, “show the German government the situation we are in. It’s not just an economic issue of the global market.”
Economic analysts such as Carsten Brzeski, chief economist at ING, tell Spiegel that the VW case illustrates in practice the long-term consequences of economic stagnation without dynamic, structural changes in Germany. He even predicts that the VW case may be a harbinger of other developments as well as an occasion for the government to realize the necessity of taking important measures of an economic nature.
Source: Skai
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