Volkswagen plans to close at least three German plants, cut tens of thousands of jobs and cut wages by 10%, the Financial Times reported.
The restructuring will mark the first local plant closures in the company's 87-year history and set off a battle with powerful unions in Germany, where Volkswagen has 300,000 employees.
The company's management has warned that drastic measures are needed as Europe's biggest carmaker faces strong competition in China, slowing sales in other major markets and the need to tackle a costly transition to electric vehicles.
Daniela Cavallo, head of Volkswagen's works council, said management had two days to change its plans, hinting at future strikes.
The works council represents Volkswagen employees and holds half of the seats on the supervisory board.
According to a spokesman for the council, there will be 10 factories closed, which supply the car manufacturer's main brand, Volkswagen.
In September, the company first signaled that it was considering closing German plants. Analysts remained skeptical given the strong opposition from politicians and the workers' council.
Volkswagen (passenger cars) chief executive Thomas Schaefer said some of the German plants were twice as expensive to operate as rival carmakers.
"Right now we're making too little money from our cars. At the same time, our costs for energy, materials and personnel continue to rise. That calculation cannot work in the long run,” Schaefer said.
On Monday, Volkswagen declined to comment on possible plant closures, citing a previous statement that it could not be ruled out.
Torsten Gröger, chief negotiator at IG Metall, Europe's biggest trade union, warned that the spending cuts would provoke "a backlash that he could never have imagined".
The German state of Lower Saxony, which is a major shareholder with control of 20 percent of the voting rights, has previously said its priority is to save jobs and has often sided with the works council.
A German government spokesman said Chancellor Olaf Scholz was adamant that "any wrong management decisions in the past should not be to the detriment of employees". | BGNES
