For the first time in the history of automobile production in Germany, Volkswagen will stop the operation of one of its plants. Starting on Tuesday, the company will cease production of cars at the plant in Dresden.
The reasons for the decision lie in several areas at once. Volkswagen has faced a sharp decline in sales in China and Europe, as well as additional pressure from US import tariffs. Against this background, the concern has strengthened its cost optimization program and is trying to increase operating profit.
Bernstein analyst Stephen Reitman noted that the closure of the Dresden plant fits into a large-scale restructuring plan. Volkswagen intends to cut about 35,000 jobs in Germany. The management of the concern considers such measures necessary to maintain competitiveness in the face of a slowdown in the global auto market.
The plant in Dresden has been operating since 2002 and has produced about 200,000 cars in that time. For comparison, the plant in Wolfsburg produces more cars in less than six months.
