As Volkswagen faces rising costs, union pressures, and political challenges in Germany, the auto giant considers closing domestic plants for the first time in history. Will ASEAN emerge as the new manufacturing hub, or will China maintain its appeal? By Investment Monitor
The company’s interest in China has been criticized domestically but, as rising costs and messy politics linger, will they commit to more ties with Asia’s biggest economy or look to ASEAN as a more cost-effective base for manufacturing?
Volkswagen AG is considering closing manufacturing plants in Germany. It would be the first-ever closure in Germany in the company’s entire history.
The announcement could unleash a major labor dispute. The car company is considering abolishing a decades-old agreement with unions to protect jobs and workers.
De-industrialisation fears have been looming for some time, but if the German brand follows through then it will essentially confirm that manufacturing is facing a transformative decline in the country. If closures happen, where will Volkswagen, the country’s largest industrial employer, takes its business?
Costs, politics, and unions
There are a few reasons why Volkswagen is reviewing what would be a deeply disruptive and historic decision.
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