A file photo of the Volkswagen logo taken in Wolfsburg, Germany. AFP/USA

Volkswagen Group said in a statement on the 2nd that the company is considering closing one of its car manufacturing plants and one parts plant in Germany for the first time and terminating an employment protection agreement that has been in place since 1994 in a bid to further cut expenses.

Volkswagen passenger car brand profit margins have been low for a long time, and the company hopes to improve its financial situation by reducing costs. However, cost-cutting has become more difficult as consumer spending has slowed during the transition to electric vehicles. In a statement, Volkswagen Group's chairman of the board of management, Ogbomu, said, ‘The general environment has become tougher and Germany is gradually falling behind in terms of competitiveness.’

VW currently employs about 650,000 people worldwide, nearly 300,000 of whom are in Germany. The closure plan, if implemented, would be the first time in Volkswagen's history that a plant has been shut down in Germany, and could lead to conflict with VW's labour council in Germany. Daniela Cavallo, chairwoman of VW's labour committee, said the committee would ‘strongly oppose’ the board's proposal.

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