The details are still scanty. The company hasn’t even published the plans in its websites. The plans were picked from internal memo shared between management and employees. Probably we will get more insights tomorrow when the CEO and CFO meet with the unions to discuss the plans.
However, in the past, analysts touted Osnabrueck and Dresden as potential targets for closure. Osnabrueck has around 2,300 workers, estimated to have a capacity of 100,000 vehicles and is used to produce T-Roc Cabriolet, Porsche Cayman and Porsche Boxster. However, a recent analysis by Automobilwoche established that its capacity utilization is around 18%. Porsche moved some production of the 718’s to Osnabrueck from its main plant Zuffenhausen in mid-2023 due to overflow. Volkswagen plans to end the production of the T-Roc Cabriolet which had sales of 11,693 units in the first 11 months of 2023, in 2025. Hence, given current demand situation and the decision to end the sale of the 718’s in Germany in July 2024, Zuffenhausen plant which has undergone upgrades for the future should now be sufficient.
In September last year, Bloomberg reported that Dresden plant which employs around 300 people and has annual operating costs of between €60 million to €70 million was being considered for closure.
Given the mention of a “large plant” in the statement, I think the mostly likely casualty is the Osnabrueck plant. Assuming each worker earns 70 euros per hour including benefits (in 2010, average auto worker in Germany earned $67.14 per hour in salary and benefits), that would be a cost-saving of around 293 million euros per year (70x35x52x2300) or around 1.6% of 2023 net profit (17.9 billion euros). However, the cost-savings from plant closures, according to the company, is expected to be within the 10 billion euros (not additional).