Wage cuts or plant closures: how Volkswagen can save itself

Volkswagen’s structural and financial problems have become very public in recent weeks. The board’s first response was to promote the idea of cutting capacity, especially in Germany. This would allow Volkswagen to reduce fixed costs and balance production capacity to demand. The company said that it was expecting to sell 500,000 fewer cars a year over the long term than it had done in the past, broadly equivalent to the output from two factories. Analysts and commentators began to ponder which plants might close, especially in Germany.