Volkswagen anticipates facility shutdowns
Industry analysts are forecasting potential plant shutdowns at Volkswagen in Germany due to financial belt-tightening steps. As Helena Wisbert, head of the Automotive Research Center (CAR) in Duisburg, expressed to "Der Spiegel", it's an unavoidable situation. Economists advise against government interference.
On Monday, VW's main brand announced a harsher financial belt-tightening plan following a management meeting, no longer ruling out plant closures and layoffs. Wisbert characterized this move to "Der Spiegel" as a "game-changer" in the automotive crisis. Until now, low plant usage had been balanced by cost savings from suppliers. However, she stated, "that's no longer sufficient."
Moritz Schularick, president of the Kiel Institute for the World Economy, views the announced cost-cutting measures as a turning point in the German automotive industry. "I've consistently maintained that I don't believe all German automakers will make it through the decade without change. This is now becoming evident," he conveyed to "Wirtschaftswoche."
Nonetheless, he doesn't view this as a call for state intervention. "We shouldn't hinder the process of structural change. Developing industries are in dire need of labor," he continued.
Veronika Grimm, an economic consultant, concurs that plant closures might be in the cards. However, she insists that the government "shouldn't interfere." She shared this viewpoint with "Rheinische Post." The automotive sector has been lobbying in Brussels for years to delay transformation, and Grimm finds fault with governments for lacking foresight. However, the state does have a role in vocational training and further education.
Given the financial struggles and the need for cost-saving measures, VW might consider closures of some plants as part of their harsh belt-tightening plan, as suggested by Veronika Grimm, an economic consultant. Economists like Moritz Schularick believe that such changes are inevitable in the German automotive industry and should not be halted by government intervention.
