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Volkswagen says it could close plant in Germany for the first time ever

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Are fewer people buying electric vehicles?


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Volkswagen says auto industry headwinds mean the German automaker can’t rule out plant closings in its home country, while the company is also dropping a longstanding job protection pledge that would have barred layoffs through 2029.

“The European automotive industry is in a very demanding and serious situation,” Oliver Blume, Volkswagen Group CEO, said in a statement Monday.

He cited new competitors entering the European markets, Germany’s deteriorating position as a manufacturing location and the need to “act decisively.”

A Volkwagen plant closure in Germany would mark the first time the automaker, which was formed in 1937, had closed a domestic factory, according to Bloomberg News. It would also be the first time the company had shuttered any of its manufacturing plants since its U.S. facility in Westmoreland, Pennsylvania, closed in 1988, the dpa news agency reported.

Thomas Schaefer, the CEO of the Volkswagen Passenger Cars division, said efforts to reduce costs were “yielding results” but that the “headwinds have become significantly stronger.”

Mounting competition from China

European automakers are facing increased competition from inexpensive Chinese electric cars. Volkswagen’s half-year results indicate it will not achieve its target for 10 billion euros ($11 billion) in cost savings by 2026, the company said.

The discussion around closures and layoffs is for the company’s core Volkswagen brand. The brand saw operating earnings sag to 966 million euros ($1.1 billion) from 1.64 billion euros in the year-earlier period.

The group also includes luxury makes Audi and Porsche, which have higher profit margins than the mass-market vehicles made by Volkswagen, as well as SEAT and Skoda.

The company has sought to cut costs through early retirements and buyouts that avoid forced layoffs, but is now saying those measures may not be enough. Volkswagen has some 120,000 workers in Germany.

Union officials and worker representatives attacked the idea of closings or layoffs. Management’s approach is “not only shortsighted, but dangerous, as it risks destroying the heart of Volkswagen,” Thorsten Groeger, chief negotiator with VW for the IG Metall industrial union, said on the union’s website.

Top employee representative Daniela Cavallo said that “management has failed… The consequence is an attack on our employees, our locations and our labor agreements. There will be no plant closings with us.”

The governor of Germany’s Lower Saxony region, Stephan Weil, who sits on the company’s board of directors, agreed the company needed to take action but called on Volkswagen to avoid plant closings by relying on alternative ways to reduce costs: “The state government will pay particularly close attention to that,” he said in a statement reported by the dpa news agency.


What to know about Biden’s new China tariffs

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The European Union in July moved to impose provisional tariffs on Chinese EVs, although the EU will only collect the levies if talks with Beijing fail to yield a trade deal. The levies would consist of 17.4% on cars from BYD, 19.9% from Geely and 37.6% for vehicles exported by China’s state-owned SAIC. Geely’s brands include Polestar and Sweden’s Volvo, while SAIC owns Britain’s MG.

President Joe Biden in May announced tariffs of up to 100% on Chinese EVs, quadrupling the current tariff of 25%. 



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Mayorkas warns of “serious” consequences for Homeland Security if government shuts down

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Washington — Homeland Security Secretary Alejandro Mayorkas warned Friday that his agency could suffer “serious” consequences if Congress fails to pass legislation funding federal agencies and averting a government shutdown in the next few hours.

In an interview with “Face the Nation with Margaret Brennan,” Mayorkas said many components of the Department of Homeland Security would be affected by a lapse in funding, including the Transportation Security Administration (TSA), FEMA and Border Patrol.

The homeland security chief added that a failure by lawmakers to pass a stopgap spending bill before Saturday would also mean staff at the Countering Weapons of Mass Destruction Office would be redirected to other parts of his department.

“The implications and the consequences are serious, especially when it comes to Homeland Security,” Mayorkas said.

He urged Congress to approve legislation that would keep government agencies operating before midnight, when a short-term extension enacted in September will expire.

House Speaker Mike Johnson unveiled earlier this week a legislative package negotiated with Democrats that would have extended government funding through March 14, provided more than $100 billion in disaster aid for states impacted by extreme weather events, and given members of Congress a pay raise, among other provisions.

But the proposal was swiftly met with pushback from some conservative Republicans, who balked at the size and scope of the 1,550 page deal. Crucially, it was also criticized by billionaire Elon Musk, an ally of President-elect Donald Trump, and then by the incoming president himself.

Trump and Musk torpedoed the package, with Musk taking to X, the social media platform he owns, to lambaste provisions of it. The president-elect further upended negotiations over a funding deal when he called on Republicans to address the debt limit — which is set to be reinstated Jan. 1 — in their plan.

Johnson unveiled a second measure Thursday, which would have funded the government for three months, suspended the nation’s borrowing limit until January 2027 and provided $110 billion in disaster relief. The more tailored legislation, which Trump backed, also included health care provisions, a one-year renewal of the farm bill and funding for rebuilding the Francis Scott Key Bridge in Baltimore, which collapsed in March.

But that package failed to pass the House with the necessary support after it was opposed by most Democrats and more than three dozen Republicans.

That defeat sent Johnson and GOP leaders back to the drawing board, with the prospect of a shutdown rising with each passing hour. Republicans are now discussing voting on three provisions of the package individually, sources familiar with the matter told CBS News: a clean extension of government funding; billions of dollars in disaster aid; and assistance to farmers.

Mayorkas told “Face the Nation” that a shutdown just before the holidays — when tens of millions of Americans are traveling — would mean TSA employees at airports throughout the country would be forced to work without pay. However, they would likely receive backpay after a shutdown ends, as has happened before after previous funding lapses.

“We’re going to have tens of thousands of TSA employees working an incredibly high volume of passenger traffic throughout our airports across the country, and they will be doing so keeping the American public safe without pay,” he said.

The Homeland Security secretary also said those impacted would include U.S. Border Patrol agents stationed along the U.S.-Mexico border. 

“There are people in government service who are dedicating their talent and their energy to the well-being of the American people, who rely on their paychecks to make ends meet, and it is the holiday season, after all, but our men and women on the border will be guarding the border of the United States at no pay if funding doesn’t come through,” Mayorkas said.

The $110 billion in disaster assistance that will likely be included in a spending deal includes money for FEMA, which has been responding to the hurricanes that devastated the southeast this fall.

Mayorkas said that inaction by Congress would impact those states hit by the storms, including North Carolina and Florida.

“What FEMA will need to do, another significant impact of the failure to fund the federal government, is they will now need to delay — they’ll put on pause certain contracts, certain projects that are actually repairing communities devastated by extreme weather events, by tornados, by hurricanes, by fires, and that will delay the rebuilding of communities and really delay the ability to deliver for people who have suffered so much,” he said.

Mayorkas said a shutdown occurring over the holidays would force the Department of Homeland Security to “make difficult decisions now to delay projects.”

Lawmakers representing those storm-ravaged states have pushed for disaster relief to be included in any legislative package funding the government. 



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Watch: White House takes questions on looming government shutdown

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Watch: White House takes questions on looming government shutdown – CBS News


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White House press secretary Karine Jean-Pierre spent most of her Friday press briefing answering questions about the possible government shutdown. Jean-Pierre said several times that Congress had a bipartisan deal and that House Speaker Mike Johnson needs to stick to it.

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What to know about the government shutdown deadline threatening the U.S.

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What to know about the government shutdown deadline threatening the U.S. – CBS News


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House Speaker Mike Johnson is facing a government shutdown after Elon Musk and President-elect Donald Trump decried his spending bill that lawmakers on both sides of the aisle negotiated to keep the lights on. CBS News’ Caitlin Huey-Burns reports.

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