President Donald Trump’s push for Germany’s top automaker to build a U.S. plant is facing resistance, as employees demand job security before the move. Audi’s top labor official said the company must secure jobs and production in Germany before expanding to the United States.
The automaker is weighing plans for a U.S. manufacturing hub, even as its parent company, Volkswagen AG, already operates one plant in the country and is building another for its Scout brand.
Jörg Schlagbauer, the company’s works council chief, who is also the company’s deputy board chairman said “We are not refusing to discuss the matter, but for capacity reasons we do not see any need to build a plant in the U.S. at present. If we need a plant in the U.S. for political reasons, it cannot be at the expense of employees and capacity utilization in Germany.”
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This comes at a time when companies are increasingly planning to move production to the U.S. due to Trump’s heavy tariffs. In early 2025, President Trump imposed a 25% tariff on European car imports, creating a significant impact on the EU’s automotive industry.
German carmakers like Volkswagen, BMW, and Mercedes-Benz, which account for 73% of the 820,000 EU cars exported to the U.S. are expected to experience severe financial problems due to this. Porsche, reliant entirely on imports, could lose €3.4 billion ($3.9 billion) in earnings by 2026, while Stellantis reported a €2.3 billion ($2.7 billion) net loss in the first half of 2025.
While Audi and Porsche AG are under pressure to move production to the U.S. because they lack plants there, lower demand in China and muted sales in Europe mean their factories at home are running below capacity, and labor leaders are wary about giving up more output.
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Audi reached an agreement in March to cut 7,500 German positions by 2029 via buyouts and early retirement, in exchange for extending job security guarantees for remaining workers until 2033. The company is currently in the process of informing the employees about the offers, though so far “no significant staff reductions” have taken place, a labor spokesperson said, according to Fortune.
Other prominent carmakers seeking to expand its manufacturing in the U.S. to avoid the brunt of tariffs include Mercedes-Benz and BMW. While Mercedes-Benz will add its best-selling GLC SUV to its Alabama plant lineup from 2027, BMW is considering adding shifts at its Spartanburg plant. BMW, which has urged the European Union to cut tariffs on vehicle imports from the U.S. to 2.5% from 10%, is the largest U.S. car exporter by volume. Mercedes-Benz also exports heavily from its Alabama plant, its center of production for SUVs.
Trump tariffs have added pressure to the German automobile industry at a time when it is already struggling with weak European demand and stiff competition.