Volkswagen needs deep cuts to remain competitive, CEO says ahead of crunch talks
Oliver Blume said the company’s overhead costs are more than 30% above peers as Volkswagen weighs another 50,000 job cuts.
- On Friday, Volkswagen CEO Oliver Blume warned that deep cost cuts are required to keep the automaker afloat as it prepares for weeks of crunch talks over a planned revamp.
- Declining profits and overcapacity in Europe plague the automaker, which is squeezed by aggressive Chinese competition, falling profits in China, and import tariffs in the United States.
- Overhead costs remain more than 30% higher than comparable firms, while current margins of less than 4% are insufficient to generate funds for new technologies and products, Blume said.
- Potential restructuring may include up to 50,000 job cuts, affecting German sites including Emden, Hannover, Zwickau, and Neckarsulm, though Blume stressed no decisions on plant closures exist.
- The Volkswagen supervisory board meets September 4 to discuss turnaround plans, while Blume will tour at-risk plants next week amid controlling families' demands for dramatic restructuring.
110 Articles
110 Articles
The CEO Oliver Blume wants to save, but needs the approval of the Supervisory Board. The chances of success seem low, because the board is ticking as politically as no other.
The Saxony plant is one of the sites threatened with closure as part of the massive restructuring plan prepared by the German manufacturer. The site, recently transformed to produce 100% electric vehicles, is facing Chinese competition and the decline in car sales in Europe.
The VW plants in Emden and Zwickau are under strong pressure despite billions of investments in e-car production. Because VW CEO Blume wants to save even more. Now he has faced the employees.
In times of greatest fear of existence among the employees of the Volkswagen plant in Zwickau-Mosel, Group CEO Blume attended a business meeting. Everyone hoped he would make a commitment to the location.
The giant's CEO called on workers to unite, and they booed the planned measures, which include mass layoffs.
In the light of the current savings pressures at Volkswagen, significant cuts are also expected in the management of the car manufacturer. (ANSA)
Coverage Details
Bias Distribution
- 46% of the sources lean Right
Factuality
To view factuality data please Upgrade to Premium
