Unit sales by the Volkswagen brand grew 14.5% in the first four months of 2006, but continued strikes in Pamplona could force VW’s brand chief to take drastic measures at its Spanish plant.


“A closure is not in discussion at the moment,” Wolfgang Bernhard told Reuters at a vehicle launch, but he added that the situation was becoming “increasingly more difficult”.


Bernhard also reportedly said that 1,200 staff at VW’s Wolfsburg plant would find themselves without work once production of the redesigned Golf wagon moves to Mexico.


Reuters said Bernhard plans to decide in the coming days whether to shift some of the production of the Polo subcompact from Pamplona to Brussels, where it builds the Golf.


The news agency said the veiled threat plays the two assembly plants off against each other, since VW’s under-utilised Belgian factory has also been the subject of repeated speculation over its closure.


Reuters noted that Volkswagen had previously told organised labour in Pamplona it would shift Polo production to its Bratislava plant. VW’s eastern European factories are already well utilised and their workforces less prone to bargain for job guarantees.


Bernhard also reaffirmed his commitment to restructuring VW’s six western German plants, the report said.


Confirming that the closure of parts of its automotive components operations in Germany was possible, Bernhardt reportedly said a compromise over restructuring measures must be reached by the end of the year during negotiations with VW’s works council.


Union representatives told the news agency they doubted VW was serious about finding replacement work for the Golf wagon assemblers whose work was going to Mexico with the changeover to the Mark V model. VW is trying to shed 20,000 workers as part of its restructure.


The company told Reuters sales at its core VW brand rose 10.9% to 281,000 vehicles in April and 14.5% to 1.08m for the first four months to the end of April.


But Bernhard expects demand to stagnate in western Europe and possibly even decline in the company’s home market, the report added.