The largest European vehicle manufacturer, German Volkswagen (VW), on Monday reduced production for the first time in the past 25 years, following a worsening crisis in the global automotive industry.
The suspension of production for one week is likely to affect between 60,000 and 92,000 workers. VW hopes to avoid accumulating excess business capacity after a sharp decline in car sales worldwide. Volkswagen’s German competitors Daimler, the manufacturer of luxury vehicles Mercedes-Benz, and BMW have already announced plans to reduce working hours. These announcements coincided with a renewed call from the German government to Opel, the German branch of the struggling American automotive giant General Motors, to develop a restructuring plan before Berlin considers providing state aid to the group. Opel reportedly needs 3.3 billion euros (4.3 billion dollars) in government loan guarantees to survive the current crisis. GM’s Swedish branch Saab has sought creditor protection. Meanwhile, Germany has opened negotiations with the U.S. government regarding the automotive sector, and a visit from the German Minister of Economy to Washington for negotiations is expected soon. (Hina/Dpa)
