Volkswagen is facing tough cuts: at least three plants could soon close. Despite high profits, the Group is struggling with structural problems and the urgent transformation to electromobility. The crisis is a shock for the German automotive industry and a wake-up call for Germany as an industrial centre - because the pressure to adapt quickly and comprehensively has rarely been greater.
Volkswagen is facing one of the most difficult challenges in its recent history. The possible closure of at least three plants represents a deep cut that is causing a stir not only among employees, but in the entire automotive industry. The move does not come as a surprise to many, but the tremors are being felt in an industry that has been on the brink of collapse for years.
The background of the crisis is the massive upheaval in the automotive industry. While Volkswagen continues to record high profits, structural challenges are weighing heavily on the Group. The shift towards electromobility and increasing competition from new market players are putting the established car manufacturers under pressure. The technological gap that Volkswagen and other German manufacturers have to make up against innovative competitors such as Tesla is particularly serious. The billions invested in new drive types and digitalisation are weighing on the company, as are the recent losses in strategic markets, including China.
Volkswagen has pursued ambitious realignment plans in recent years. The Group is investing in sustainable technologies and striving to become the market leader in the field of electromobility. However, the change is not happening fast enough and the demand for conventional combustion engines remains an uncertain factor. The question of how long the conventional business will remain profitable is causing uncertainty. The decision to close sites could therefore be seen as the consequence of a years-long adjustment process, which is now becoming an existential risk for thousands of employees.
Comment:
Volkswagen's crisis is a wake-up call to the entire German industry. The company, once the poster child for German engineering spirit and innovative strength, is in danger of falling behind in a changing world. The announced plant closures are just the tip of the iceberg. They show that structural change can no longer be stopped and that German car manufacturers must either adapt - or be sidelined.
The transition to electromobility is just one aspect of the transformation. Companies like Volkswagen must also reinvent themselves in order to survive in a globalised and digitalised market in the long term. The challenges range from software development to sustainable production, topics that have not previously been part of the Group's core expertise. But time is pressing: New competitors have already shown that things can be done differently, and many of these companies are increasingly gaining market share.
For Volkswagen and the German automotive industry, this is about far more than just business. It is about securing the future of an entire industry and therefore also the future of Germany as an industrial centre. The current developments are a signal that a radical rethink is needed - one that requires the courage to change and the stamina of the entire workforce.
Source: www.pressebox.de and written by Engin Günder, specialised journalist
