BERLIN — Volkswagen told union leaders Tuesday that it was ending a labor agreement that protected workers from layoffs, a week after the automaker said it was considering closing factories in Germany amid slumping sales and rising costs.
The company warned last week that it needed to restructure its namesake brand to remain competitive in the face of falling demand in Europe and abroad and increased competition from China. The cost-saving measures could include closing one or two assembly plants in Germany, a step that would be a first in the auto manufacturer’s 87-year history.
On Tuesday, Volkswagen said in a statement that the decision to quit the agreement that offered job security to some 120,000 workers, along with several other labor deals, was necessary to ensure the company’s future.
“We must put Volkswagen in a position to reduce costs in Germany to a competitive level in order to invest in new technologies and new products from our own resources,” Gunnar Kilian, the head of human resources and labor at Volkswagen, said in the statement.