Key Takeaways
- Volkswagen may need to cut another 50,000 jobs to match competitors.
- CEO Oliver Blume presented restructuring plans to supervisory board.
- Proposals include possible closures of four factories in Germany.
In a significant move to enhance Volkswagen’s competitiveness, the company's CEO, Oliver Blume, has confirmed that an additional 50,000 job cuts may be necessary. This comes after the automaker had already agreed on cutting 50,000 positions across its group, including subsidiaries Porsche and Audi.
Blume stated in an internal memo seen by Reuters that the company faces a cost disadvantage of around 20% compared to its rivals. To address this, he is considering further reductions to streamline operations and improve efficiency. The memo also revealed that the company is currently assessing how many adjustments are necessary and feasible across all brands, companies, and regions.
The decision to cut jobs follows calls from workers for management to explain their restructuring plans more clearly. Blume presented these proposals to the company’s supervisory board on Thursday, but labour representatives on the committee blocked them. The proposals included job cuts as well as potential closures of four factories in Germany: Emden, Hanover, Zwickau, and Neckarsulm.
In his memo, Blume stated that 'as of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau, and Neckarsulm in the 2030s.' He emphasized a preference for ‘intelligent solutions’ to closures, suggesting options such as the defence industry or producing Chinese Volkswagen models in Europe.
The move is part of a broader effort by Volkswagen to reduce costs and improve its competitive position. The company has faced significant challenges including billions of euros in tariff costs, stiff competition in China, and pressure on its German manufacturing network to become more efficient.
While the exact number of job cuts remains uncertain, Blume’s memo confirms that the company is actively considering further reductions. This decision underscores the severity of the situation facing Volkswagen as it seeks to maintain its market position globally.
