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VW considers one car plant, one component plant in Germany

obsolete -works council

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Cost-cutting drive at namesake brand must be extended -VW

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Management 'compelled' to end job security programme

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Works council promises 'fierce resistance' to plans

(Adds bullets, share price, detail on works council stance in

paragraphs 8-11)

By Victoria Waldersee

BERLIN, Sept 2 (Reuters) - Volkswagen said

on Monday it can no longer rule out plant closures in Germany as

it pursues ways to save several billion euros in a cost-cutting

drive at its namesake brand.

The carmaker considers one large vehicle plant and one

component factory in Germany to be obsolete, its works council

said, vowing "fierce resistance" to the executive board's plans.

Volkswagen said that it also felt forced to end its job

security programme, which has been in place since 1994 and which

prevents job cuts until 2029, adding all measures would be

discussed with the works council.

"The situation is extremely tense and cannot be overcome by

simple cost-cutting measures," VW brand chief Thomas Schaefer

said in a written statement.

The Volkswagen brand, which fuels most of the automaker's

unit sales, is the first of the group's brands to undergo a

cost-cutting drive targeting 10 billion euros ($11.07 billion)

in savings by 2026 as it attempts to streamline spending to

survive the transition to electric cars.

A difficult economic environment, new competitors in Europe,

and the falling competitiveness of the German economy meant the

carmaker needed to do more, Volkswagen Group Chief Executive

Oliver Blume said in a statement to its management.

Volkswagen shares were up 2.57% as of 1325 GMT, after

jumping about 1.5% directly after its announcement at 1300 GMT.

'WRONG DECISIONS'

German union IG Metall called Volkswagen's announcement an

irresponsible decision that "shakes the foundation" of the

company, which is Germany's largest industrial employer and

Europe's top carmaker by revenue.

Works council chief Daniella Cavallo said in an interview on

Volkswagen's intranet that management had made "many wrong

decisions" in recent years, including not investing in hybrids

or being faster at developing affordable battery-electric cars.

Instead of plant closures, the board should be reducing

complexity and taking advantage of synergies across the

Volkswagen group's plans, Cavallo argued, criticising the

company's "documentation madness" and "salami-slicing tactics".

Chief Financial Officer Arno Antlitz will speak to staff

alongside VW brand chief Thomas Schaefer at a works council

meeting on Wednesday morning. Cavallo said she expects Chief

Executive Oliver Blume to get involved in negotiations as well.

($1 = 0.9034 euros)