German car giant Volkswagen’s problems and warnings about possible factory closures require government intervention, German Economics Minister Robert Habeck said on Tuesday.
Volkswagen said Monday it can no longer rule out forced layoffs and factory closures as part of major cost-cutting plans aimed at getting the carmaker’s core VW brand back on track.
Volkswagen has never closed a factory in Germany, and has not closed one anywhere in the world since 1988.
VW union leaders reacted with outrage to Monday’s announcement and vowed to crack down on any factory closures or layoffs.
Habeck said Tuesday that steps must be taken to ensure that Germany remains a major car producer and remains internationally competitive, adding that he took the decision to intervene after close consultation with partners.
“Everyone involved must take responsibility for the workers in the factories,” Habeck said.
Habeck acknowledged that automakers face enormous challenges as they transition to electric vehicles and fend off foreign competitors.
According to him, German car manufacturers must deal with this competition.
Habeck called the auto industry a cornerstone of the German economy and “it must remain that way.”
The major car manufacturers and their suppliers are good employers for tens of thousands of employees in Germany, “engines of prosperity” throughout the country and important drivers of innovation, Habeck said.
That’s especially true for Volkswagen, one of the world’s largest car brands, he said.
Habeck pointed to the German government’s renewed efforts to boost demand for electric vehicles for commercial fleets and said confidence in long-term planning is crucial to keeping Germany’s auto manufacturing plants competitive.
EU rules stipulate that only CO2-neutral vehicles may be registered from 2035. According to Habeck, this gives car manufacturers the opportunity to make long-term plans.
The EU’s de facto ban on new cars with internal combustion engines is highly controversial. In Germany, sales of electric vehicles have recently fallen after subsidies for private buyers expired.
