Volkswagen Warns of German Plant Closures, End to Job Security Scheme

VW logo badge is seen on display at the North American International Auto Show in Detroit, Michigan, US, January 16, 2018. REUTERS/Jonathan Ernst
VW logo badge is seen on display at the North American International Auto Show in Detroit, Michigan, US, January 16, 2018. REUTERS/Jonathan Ernst
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Volkswagen Warns of German Plant Closures, End to Job Security Scheme

VW logo badge is seen on display at the North American International Auto Show in Detroit, Michigan, US, January 16, 2018. REUTERS/Jonathan Ernst
VW logo badge is seen on display at the North American International Auto Show in Detroit, Michigan, US, January 16, 2018. REUTERS/Jonathan Ernst

Volkswagen said on Monday it can no longer rule out plant closures in Germany as it seeks ways to save several billion euros at its namesake brand in a cost-cutting drive.

The carmaker considers one large vehicle plant and one component factory in Germany to be obsolete, its works council said, vowing "fierce resistance" to the executive board's plans.

Volkswagen said that it also felt forced to end its job security programme, which has been in place since 1994 and which prevents job cuts until 2029, adding all measures would be discussed with the works council, according to Reuters.

"The situation is extremely tense and cannot be overcome by simple cost-cutting measures," VW brand chief Thomas Schaefer said in a written statement.

The Volkswagen brand, which fuels most of the automaker's unit sales, is the first of the group's brands to undergo a cost-cutting drive targeting 10 billion euros ($11.07 billion) in savings by 2026 as it attempts to streamline spending to survive the transition to electric cars.

A difficult economic environment, new competitors in Europe, and the falling competitiveness of the German economy meant the carmaker needed to do more, Volkswagen Group Chief Executive Oliver Blume said in a statement to its management.



Japan's Nintendo Fans Test Switch 2 ahead of Launch amid Tariff Worries

An attendee plays Mario Kart World by Nintendo Switch 2 during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention center in London, Britain, April 11, 2025. REUTERS/Isabel Infantes
An attendee plays Mario Kart World by Nintendo Switch 2 during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention center in London, Britain, April 11, 2025. REUTERS/Isabel Infantes
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Japan's Nintendo Fans Test Switch 2 ahead of Launch amid Tariff Worries

An attendee plays Mario Kart World by Nintendo Switch 2 during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention center in London, Britain, April 11, 2025. REUTERS/Isabel Infantes
An attendee plays Mario Kart World by Nintendo Switch 2 during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention center in London, Britain, April 11, 2025. REUTERS/Isabel Infantes

Nintendo fans were given a chance to try out the company's new Switch 2 gaming device at an event near Tokyo on Saturday, ahead of a release that some worry could be overshadowed by tariffs driving up prices.
"Since Mr. Trump became president tariffs have gone up so I am concerned about a price hike not just for the game console but for accessories too," said Hidenori Tanaka, 55, a real estate company employee, who attended the event.
Consumers around the world could face higher prices for electronic devices as tariffs imposed by the US President Donald Trump's administration on trading partners including China raise costs for companies operating global supply chains. While Trump has rolled back some tariffs, the threat of a damaging trade war still looms, Reuters said.
Gamers at the pre-launch event began lining up outside the Makuhari Messe convention center near Tokyo from mid-morning to play Mario Kart World, Donkey Kong Bonanza, and other titles on the Switch 2.
Despite the possibility of higher prices, there are early indicators of robust consumer demand for the successor to the Switch, which has sold more than 150 million units since 2017 and transformed Nintendo's fortunes.
The Kyoto-based gaming company said on Wednesday it had received 2.2 million applications in the lottery for Switch 2 in Japan and could not fulfil all the demand.
"Honestly, I didn't think I had a shot. Everyone on social media was saying they missed out, so I figured I would too," said Hyuma Hashiguchi, 28, who won the lottery to be among the first to buy the Switch 2.
Nintendo is holding hands-on events around the world including in New York, Berlin and Hong Kong.
The Switch 2 will sell for 49,980 yen ($350) for a Japanese-language-only version. In the United States, Nintendo initially paused pre-orders due to tariff concerns but later said it would maintain pricing at $449.99.