Volkswagen is considering closing factories in Germany for the first time, in a move that shows the pressure Europe’s top carmaker is facing from cheap Asian competition.

The move marks the first major clash between Chief Executive Oliver Blume, who analysts have described as more of a consensus builder compared to his more combative predecessor Herbert Diess, and unions that command substantial influence at VW.

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

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