Trade unions say Volkswagen is preparing to close three factories in Germany and lay off tens of thousands of jobs.

Volkswagen plans close at least three factories in Germanyfire dozens thousands of employees and downsize remaining factories in Europe’s biggest economy as it plans restructuring deeper than expected– said the head of his works council. Europe’s largest carmaker has been in talks with unions for weeks about its plans to revamp its business and cut costsincluding for the first time considering the possibility of closing plants in Germany.

“Management is taking all of this absolutely seriously. This is not saber rattling “In a round of collective bargaining,” Daniela Cavallo, head of the Volkswagen works council, assured several hundred employees at the automaker’s largest plant in Wolfsburg on Monday. “This is the plan of the largest industrial group in Germany to start sale in your country of originGermany,” Cavallo added, without specifying which plants would be affected and approximately how many 300,000 employees from the Volkswagen Group in the country may be fired.

Comments are important escalation of the conflict between Volkswagen workers and group management, which is under intense pressure to cut costs and remain competitive due to decline in demand in China and Europe. They also increase pressure on German government act under pressure the weakness of its economywhich is experiencing a second year in a row of recession and has a coalition of the chancellor Olaf Scholz looking for ways to stimulate growth. Scholz is lagging in the polls with federal elections due next year.

Pressure on the government

Cavallo argued that Berlin needs urgently develop a plan teacher for German industry to ensure that it does not “go to waste.” A government spokesman said Berlin was aware of Volkswagen’s difficulties and was in close dialogue with the company and workers’ representatives. “The Chancellor’s position on this matter is clear: possible erroneous management decisions in the past should not be to the detriment of employees. The goal is now save and maintain jobs“, said the representative at the next press conference.

Cavallo says there was agreement between workers and the board of directors about the nature of the problems facing the automaker and many of its European peers, ranging from slower electrical transition than expected so far tough competition Chinese automakers are coming to Europe. “We are not very far from analyzing the problems. But we are very far from answering them,” he assured.

Monday’s announcement follows more bad news for German automakers last week. Mercedes-Benz promised to step up cost-cutting measures after its profits fell. Meanwhile, Porschemajority-owned Volkswagen said it was cutting its dealer network in China to reflect weak demand in the world’s largest auto market, also pointing to billions of euros in cost cuts. German carmakers also fear they will find themselves at the center of a trade war between the European Union and China as huge EU tariffs on Chinese electric cars come into effect this week.