The carmaker considers one large vehicle plant and one component factory in Germany to be obsolete, its works council said, vowing “fierce resistance” to the executive board’s plans.

Volkswagen said that it also felt forced to end its job security programme, which has been in place since 1994 and which prevents job cuts until 2029, adding all measures would be discussed with the works council.

“The situation is extremely tense and cannot be overcome by simple cost-cutting measures,” VW brand chief Thomas Schaefer said in a written statement.

The Volkswagen brand, which fuels most of the automaker’s unit sales, is the first of the group’s brands to undergo a cost-cutting drive targeting €10 billion in savings by 2026 as it attempts to streamline spending to survive the transition to electric cars.

A difficult economic environment, new competitors in Europe, and the falling competitiveness of the German economy meant the carmaker needed to do more, Volkswagen Group chief executive Oliver Blume said in a statement to its management.