Germany’s iconic automobile, Volkswagen, is considering cutting 35,000 jobs in Germany to better compete with cheaper global competition, including China.

According to a new report in Reuters, “The agreement involves each factory being given its own cost reduction target, with project teams of labour representatives and managers responsible for figuring out how to deliver it and boost productivity, measured by the number of cars produced per worker, according to two sources close to management.”

Volkswagen’s managers and employees are working collaboratively on these changes. “Senior figures from both sides will give progress reports at a quarterly meeting, the management sources added, emphasizing that if interim cost reduction targets are not met, negotiations may need to begin again.”