Volkswagen AG is reportedly planning to close two to three factories in Germany, which could result in over 15,000 job losses. Analysts from Jefferies indicate that the company may proceed with these closures without needing supervisory board approval, potentially incurring provisions of up to €4 billion ($4.4 billion) in the fourth quarter. This decision follows Volkswagen's recent termination of its long-standing job security agreement, raising concerns about future labor relations as unions may only strike over pay, not layoffs. The automaker is facing heightened competition from Chinese manufacturers and escalating operational costs, leading to a pressing need for restructuring. Executives have acknowledged the lack of a backup plan should negotiations with unions falter. The situation is compounded by the fact that around a third of the EU automotive sector's factories are operating below capacity, which could negatively impact the broader EU economy.