Volkswagen May Not Close German Factories After All

Volkswagen has a financial crisis on its hands, but there could be a solution that doesn’t end with plant closures in Germany. Ongoing negotiations are reportedly pointing to a deal could keep things running through at least 2030. It doesn’t come without concessions, however.

Details aren’t known, and nothing is official. A report from Bloomberg claims VW management is open to keeping plants open and reinstating job security agreements if workers forego bonus payments. Beyond that, VW would move Golf production from Wolfsburg to a plant in Mexico, and wind down production of VW-branded EVs at the company’s large factory in Zwickau. This facility currently builds EVs for VW, Audi, and Cupra.

The report cites anonymous sources familiar with the negotiations, emphasizing that talks are still underway. VW has no comment at this time.

If the news is accurate, it’s a major reversal from VW’s stance that plant closures are necessary for survival. Barely a month ago, VW Brand CEO Thomas Schaefer told German publication Welt am Sonntag the company doesn’t see a way forward without closing at least one factory. At the same time, the employee-led VW works council proposed sweeping wage cuts and suspended bonuses as an alternative to shuttering plants. The council and union group IG Metall have threatened massive strikes against VW should any closures take place.

VW has never closed a plant in its home market of Germany. When this whole melee began, the automaker’s large plant in Osnabruck and smaller factory in Dresden were the focal points for possible closures. Dresden is a low-volume facility supplementing ID.3 production at Zwickau. Osnabruck builds the Porsche 718 Boxster and Cayman, as well as the T-Roc Cabriolet. All three models are slated to end production soon, though Porsche is struggling with the 718’s electric replacements.

At this point, it’s unclear if an official agreement will be reached before the end of the year.