Volkswagen is preparing to formally propose up to 100,000 job losses to its supervisory board on Thursday, a move that has sparked widespread protests across its locations, according to The Guardian.
The automotive sector is a cornerstone of the German economy, directly and indirectly employing an estimated 3 million people through companies like Volkswagen, Mercedes, and BMW.
The German Association of the Automotive Industry (VDA) warned of a potential collapse in European employment unless bold decisions are made to address competition from Chinese and other rivals.
VDA President Hildegard Müller stated that handing some local car factories over to foreign ownership could help preserve employment in the region.
"Reality has overtaken political goals and approaches, increasingly jeopardising jobs," said Müller.
Müller explained that the economic crisis is visible and tangible every day across the entire European industry, with consequences becoming increasingly dramatic.
"We will not be able to keep all the factories and suppliers open this way. We should therefore open these locations to foreign manufacturers, for example.
Every location we can keep here secures jobs," said Müller.
Müller added that while options for action have dwindled, they have become all the more necessary for the current situation.
"The options for action have become fewer, but all the more necessary. Germany and Europe are in a situation that demands bold decisions.
This will also involve significant changes for people, the end of habits and entitlements that our country, regrettably, can no longer afford in some respects," said Müller.
The VDA further noted that political leaders in Berlin and Brussels cannot insulate factories from shifting future business models.
"These decisions are difficult and must be developed in dialogue with all stakeholders. They will require a willingness to change from all of us," said Müller.
A recent report by Boston Consulting highlighted that Europe's production capacity now exceeds regional demand by more than 5 million vehicles annually, equivalent to 35 production sites across the continent.
Volkswagen aims to implement this comprehensive cost-cutting program by 2030, doubling its previously planned cuts and potentially closing several plants.
Trade union IG Metall has called for a day of action on Thursday at all VW locations, including scheduled events at Emden, Zwickau, Hanover, and Kassel.
