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according to bloomberg, volkswagen is considering closing its german factories to further cut costs, which is undoubtedly another heavy blow to the government of german chancellor scholz.

the potential measures target volkswagen's main passenger car brands as well as other group entities, according to a statement released on monday, and include an attempt to terminate an agreement between the company and unions to ensure job stability until 2029.if the factory is closed at this time, it will mark the first time in volkswagen's 87-year history that it will close a factory in germany.

“the economic environment has become more difficult and new players are entering europe,” volkswagen ceo oliver blume said in a statement. “germany is falling further behind in terms of competitiveness as a business location.”

works committee chairwoman daniela cavallo said management was failing, according to a separate statement, after the company met to discuss in detail the potential losses at its core brand, which makes the golf and tiguan models. the company said it plans to close at least one of its larger car plants and a parts factory in germany, while scrapping wage agreements.

volkswagen has about 650,000 employees worldwide, including nearly 300,000 in germany. half of the company's supervisory board seats are occupied by labor representatives, and the german state of lower saxony, which owns a 20 percent stake in the company, usually sides with the unions.

lower saxony said it supported volkswagen's measures to cut costs, adding that alternatives must be explored in talks with labor representatives.