”Volkswagen” closes a production plant for the first time in its 88-year history

German auto giant”Volkswagen” will close a production plant in Germany for the first time in its 88-year history.

“Volkswagen” agreed with the labour council and union in 2024 to fire 35,000 people and reduce their capacity in Germany in response to competition from Chinese producers, drop demand in the European market, and slower than expected approval of electric vehicles.

As part of the deal, the production of automotives of”Volkswagen” in Dresden, the capital of the eastern German state of Saxonia, will be terminated by the end of this year.

The company will ban the production of vehicles at its plant in Dresden on Tuesday, marking the first time in its 88-year history the company has closed a production facility in Germany.

The closure of the factory in Dresden comes after”Volkswagen” experienced problems with the flow of cash ready due to poor Chinese sales, declining European demand and pressure on US sales from tariffs.

The company must finance investments of approximately 160 billion euros ($7.9 billion) over the next five years.

The”Volkswagen” factory in Dresden has produced less than 200,000 vehicles since production began in 2002.

The company had positioned Dresden's factory as a key model showing the company's skills at the time. Initially, Phaeton and later ID.3 were produced there.

However, no model contributed to the success of”Volkswagen”.

The closure of this factory was seen as a small step by Volkswagen to survive amid fierce competition from China, American tariffs, excessive bureaucracy in Germany, high energy costs, wide employee rights and unprecedented internal bureaucracy. /Periscope/