Volkswagen contemplates shifting Golf manufacturing to Mexico.
Volkswagen is contemplating major adjustments to bolster its primary brand's financial stability. One potential move under consideration is transferring production of the renowned Golf model from its Wolfsburg headquarters to Mexico. However, this proposition isn't considered the most probable scenario at this juncture.
The company remained tight-lipped on the matter, while a spokesperson for the works council brushed off the rumors as highly improbable. Although it's been previously reported in "Handelsblatt," Volkswagen declined to comment on the speculation.
The Golf, following in the footsteps of the Beetle, is a cornerstone model for the brand. Currently, it's exclusively manufactured at Volkswagen's Lower Saxony headquarters for the global market. VW has a facility in Puebla, Mexico, which previously produced the Beetle for the North American market.
Presently, management and labor representatives in Wolfsburg are discussing wage decreases to trim costs. This includes deliberations about wage reductions, job losses, and potential plant closures. Volkswagen looks for a 10% reduction in wages, citing the need to finance future investments. The works council, on the other hand, aims for a secure outlook for the upcoming years in exchange for concessions, with the next round of negotiations scheduled for the near future.
The Golf could shift to Poland as well
Typically, the distribution of future models among factories is a topic of discussion during Volkswagen's so-called planning round, which outlines investments for the next five years. This time, however, the factories and their prospective assignments are part of the wage negotiations due to the company's planned cost-cutting measures.
In the event that the Golf, a flagship model for the Wolfsburg plant along with the Tiguan, were to cease production, the employee side would probably seek alternative models to safeguard future job opportunities at the plant. Another option for Golf production is a VW plant in Poland. Originally, the Poznań plant was intended for overflow production of the Golf from Wolfsburg.
Both Mexico and Poland offer cheaper production costs compared to Germany. However, potential tariff threats from former and current US President Donald Trump could impact both locations. Moreover, the future of the combustion engine Golf from Wolfsburg is uncertain, given Volkswagen's pledge to eliminate combustion engines in the EU by 2035 and its focus on developing new electric models. A possibility at the Wolfsburg locale could be a new high-volume electric model, such as a full-electric version of the Golf dubbed "ID.Golf."
The shift of Golf production from Wolfsburg to either Mexico or Poland is being considered due to Volkswagen's cost-cutting measures. If the Golf were to cease production at its Wolfsburg plant, an alternative option for continued production could be at a VW plant in Poland.
