Volkswagen may close down at least two factories in Germany and end job security schemes as part of a cost-cutting drive, the conglomerate has announced.

“difficult economic environment” and “failing competitiveness of the German economy” among factors behind the decision.

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

“fierce resistance” to the plans.

The Works Council claimed that VW has already marked one “large vehicle plant” and one component factory in German territory as obsolete. The IG Metall trade union called the announcement irresponsible and argued the plan “shakes the foundation” of Germany’s largest industrial employer.

“many wrong decisions” in recent years, such as not investing in hybrids or developing affordable electric cars, Works Council head Daniella Cavallo said on the company intranet. 

Cavallo criticized VW’s “documentation madness” and “salami-slicing tactics,” saying that the board should reduce complexity and take advantage of brand synergies instead, according to Reuters.

“dramatically losing its international competitiveness” due to soaring energy costs. Russian President Vladimir Putin noted earlier this year that Western sanctions against Moscow have backfired mostly on Berlin and its industry.