Germany Braces for $3.4 Billion Tax Shortfall on VW Crisis
- Three German towns dependent on VW plants put brakes on budget
- Mayors concerned fallout may spark job cuts in local factories
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The towns that became synonymous with Volkswagen AG’s rise to the pinnacle of the auto industry are feeling the pinch of the diesel-emissions scandal, freezing spending on projects such as playgrounds amid the carmaker’s abrupt fall from grace.
Wolfsburg, the northern German town founded in 1938 to build the “people’s car,” is halting 30 projects, including the new playgrounds, an ice rink and road work totaling 17 million euros ($19 million), in anticipation of lower tax revenue from the company employing half its 125,000 population. Nearby Braunschweig and the Bavarian town of Ingolstadt, home to VW’s Audi brand, have also reined in their budgets.