Germany's Volkswagen threatens plant shutdowns due to 'highly tense' circumstances.

• Volkswagen has announced that it may have to close plants in Germany due to the need for major cost-cutting measures to secure the company's future.
• In order to secure "urgently needed structural adjustments," Volkswagen decided to end its employment protection agreement, a job security program that has been in place since 1994.
• Thomas Schäfer, CEO of VW brand, stated that the situation is extremely tense and cannot be resolved through simple cost-cutting measures.

The German carmaker announced on Monday that it may have to close plants in the country due to the need for major cost-cutting measures to secure the company's future.

Oliver Blume, CEO of Volkswagen Group, stated that the European automotive industry is facing a challenging and critical situation.

"New competitors are entering the European market, making the economic environment even more challenging, and Germany, as a manufacturing location, is becoming increasingly less competitive."

The CEO of Volkswagen Group stated that the company "must now act decisively."

The carmaker stated that it was necessary to terminate its employment protection agreement, a job security program established in 1994, in order to make "urgently required structural changes for increased competitiveness in the short term."

Volkswagen stated that a "comprehensive restructuring" of brands within the company is necessary, and that plant closures at vehicle production and component sites cannot be ruled out due to the current situation.

Thomas Schäfer, CEO of VW brand, stated that the situation is extremely tense and cannot be resolved through simple cost-cutting measures.

He emphasized the importance of discussing sustainably restructuring the brand with employee representatives as soon as possible.

Shares of Volkswagen traded 1.8% higher on Monday afternoon.