Volkswagen's Dresden, Germany, factory that builds the Phaeton is an architectural marvel where workers assemble vehicles on a moving wood floor. However, VW is in desperate need of cost savings because the bill for its emissions scandals could reach $87 billion in the highest estimates. VW Group CEO Matthias Müller wants to shutter the ornate plant and shift Phaeton production elsewhere, according Automotive News citing a report from Germany's WirtschaftsWoche. The automaker's supervisory board will reportedly discuss the matter, too.

Müller can make an easy financial argument for closing the Dresden plant. The site employs around 500 people, but they only produce about eight Phaetons a week, according to Automotive News. The posh sedan hasn't been a strong seller for years with just 4,000 total deliveries in 2014 and about 5,800 in 2013. VW allegedly lost the equivalent of around $30,000 on each one sold from 2002-2012.

While the business justification is obvious, VW might need to fight to shut down the plant. The closure would require a two-thirds vote by the supervisory board, but labor representatives hold half of the seats. "Dresden is and remains a firm part of the VW family. Even if the new Phaeton concept comes later, that does not mean that we have cause to question Dresden," said works council boss Bernd Osterloh, according to Automotive News. If the company closes the factory, it would transfer the workers to other sites.

While the Dresden plant's future is uncertain, VW still stands by the Phaeton. After the diesel scandal, the company promised the next-gen version of the sedan would be an electric vehicle and the flagship of the brand. The automaker reportedly developed a new model on the MLB platform earlier this year but scrapped the design to cut costs. VW Group of America CEO Michael Horn even promised its eventual return to the US market.

Volkswagen Phaeton Information

Volkswagen Phaeton

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