The issues dragging on profitability at Volkswagen's core brand high-priced labor, cumbersome organizational structures and an inability to keep up with advances by Chinese automakers mirror those facing Germany's overall economy.
Now, as the 87-year-old automaker is floating the prospect of job cuts and factory closures as it seeks to return to profitability, Volkswagen's struggles are being reflected in the overall troubles facing the country.
The fact that Volkswagen is no longer ruling out plant closures and compulsory redundancies shows how deep the German industry is now in crisis, said Carsten Brzeski, chief economist at ING Germany.
Germany also appears to have lost some clout in the European Union, which voted on Friday to impose higher tariffs on electric vehicles imported from China, a key trading partner of Germany.
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