Berlin says it wants to prevent Volkswagen plant closures in Germany, while stressing any decision on sites remains a commercial matter for the company.
Volkswagen could protect jobs at its German plants by building there some models it currently produces in China, Lower Saxony premier Olaf Lies said in comments to DPA published over the weekend. Lies argued that moving such production would help stabilize capacity utilization at German factories and create room for new development and innovation at company sites in the country. The remarks came after reports that Volkswagen is weighing the closure of four German factories and job cuts of as many as 100,000. Berlin has now also said it wants to prevent domestic Volkswagen plant closures, while making clear that decisions on sites ultimately rest with the company. A government spokesperson said the aim is to avoid closures in Germany by ensuring the right framework conditions, including competitive mechanisms and incentives to keep plants profitable. Lower Saxony, where Volkswagen is based and where it runs five of its six western German assembly plants, holds a 20% voting stake in the carmaker. The company has said its business model is under strain from competition from Chinese automakers, U.S. import tariffs and weakening demand in Europe. Lies, a member of the centre-left Social Democrats, had already raised the idea in April after a visit to China of exploring whether cars made for the Chinese market could be produced in Germany instead. Separately, Frankfurter Allgemeine Zeitung reported on Saturday that Volkswagen subsidiary Porsche Automobil Holding SE is considering moving production of its Cayenne SUV from Slovakia to its Leipzig plant in Germany to improve capacity utilization.