Volkswagen to close three German plants, cutting tens of thousands

Volkswagen closes three German plants, putting Martorell and Landaben on alert

What happens when Europe’s largest carmaker announces it will shut down three factories and cut tens of thousands of jobs? The rest of the supply chain starts doing the math. Volkswagen has informed its works council of a plan to close three plants in Germany and reduce employment by tens of thousands, according to information that sparked this discussion. This is not an isolated incident: it confirms that the European industrial model has a cost problem that subsidies can no longer mask.

The initial reaction was disbelief. Three plants in Germany is significant. The second reaction was antiestéticar of contagion: if the German giant cuts back, Spanish plants — Martorell and Landaben — are left watching from the sidelines. The recurring argument is that next year will see widespread layoffs across Europe. This is not a doom-and-gloom prediction; it is the reading of an assembly line that had been warning for some time.

The problem isn’t cars, it’s prices

A common thread runs through the entire discussion: Volkswagen isn’t selling poorly due to lack of demand, but because its cars have become expensive. A Polo or Ibiza costing over €20,000, a Golf at premium prices, an ID3 with drum brakes for €40,000. The complaint is unanimous: the brand abandoned the budget segment and now competes with those who do it better and cheaper. The market does not reward nostalgia.

Irony creeps in naturally. “Just raise your car prices more and it’ll be solved,” summarizes one of the most upvoted comments. And they have a point: for years, the strategy was to increase prices, cut equipment, and rely on brand inertia. That inertia has run out.

China stops buying, and Europe shows no mercy

The second block of analysis points to China. Some argue that half of Volkswagen’s sales were there. When the Chinese market shifted to electric vehicles, local brands began outperforming European ones. The result is oversized industrial capacity in Germany and plummeting demand. It is not a tariff issue: it is a product issue.

Added to this is regulation. The EU maintains emission targets and multimillion-euro fines even as the industry struggles. One part of the analysis argues that environmental regulations make cars more expensive and squeeze manufacturers; another counters that Chinese brands sell cheap precisely because they don’t comply with the same rules. The clash of narratives is total.

German unions play with an advantage

Here lies the detail that explains why cuts hurt less in Germany than in Spain. IG Metall, the German metalworkers’ union, has over two million members and a little-known practice: it invests dues in shares of companies where it is present, and employees transfer their voting rights. This allows them to seat one of their own on the board of directors. Translation: if plants must close, they close outside Germany. The two Spanish sites remain uncertain.

The sector’s weight in Spain is not minor. Automotive accounts for around 10% of GDP and, including direct, indirect, and induced jobs, approaches two million workers. It is one of the two engines alongside tourism. If Germany squeezes, it is felt here.

Energy and the political pendulum

The energy backdrop appears in several sections. Some argue that Europe will return to buying Russian energy once the war in Ukraine ends, with a repaired pipeline and new prices. Others respond that this is a joke: infrastructure is damaged and trade relations broken. What is clear is that energy costs remain a burden for intensive industry.

Political readings also have their place. It is argued that European voters prioritized climate suicide over prosperity and are now reaping the results. The repeated conclusion is uncomfortable: you cannot simultaneously demand numerous environmental requirements and complain about layoffs. It’s one or the other.

What happens to Martorell and Landaben

The overarching question is whether the Spanish plants are included in the package. The honest answer is that no one knows. The German union will fight to keep jobs at home, while the company seeks the lowest costs. Spain has a competitive advantage in labor costs but a disadvantage in energy and logistics. The outcome depends on negotiation, not sentiment.

Meanwhile, the sector looks to next year with concern. If Europe’s largest manufacturer cuts tens of thousands of jobs, the domino effect on suppliers, workshops, and entire regions is hard to exaggerate. And there is no Plan B in sight.

In the end, the most repeated conclusion is the most cynical: just raise prices more, let’s see if that fixes it.