Volkswagen has defended its plans to consider closing plants in Germany, saying that falling car sales have left the company with a… surplus of about two plants.

Demand in Europe has not recovered since the pandemic, with car deliveries about 2 million short of their peak, Chief Financial Officer Arno Antlitz told an employee meeting in Wolfsburg.

Volkswagen has lost sales of about “500,000 cars, the equivalent of about two plants,” Antlitz said. “We have to increase productivity and reduce costs,” he added.

Hundreds of employees booed Antlitz and Chief Executive Oliver Blume when they took the stage to speak

Europe’s biggest carmaker said this week it is weighing whether to close plants in Germany for the first time and end job security deals after years of ignoring overcapacity and falling competitiveness.

The move sets up a showdown with powerful unions as the country’s most important industry battles for its future, Bloomberg reports.