
2 days · 2 summary articles
Volkswagen CEO proposes 50,000 more job cuts amid cost pressure: unions, board oppose plan
Volkswagen rules out factory closures in cost cuts but warns jobs at risk in Germany
Volkswagen CEO Oliver Blume has stated that the company may need to cut an additional 50,000 jobs to close a competitive gap, according to an internal memo obtained by Reuters. This announcement comes on top of the 50,000 job cuts already planned by 2030, potentially bringing the total to 100,000 job cuts.
In the memo, Blume emphasizes that the company is evaluating adjustments across all brands, companies, and regions. The reason for these cuts is the company's higher costs compared to competitors. Specifically, Audi and its subsidiaries are reported to have a cost disadvantage of nearly 20% compared to other manufacturers.
However, this plan has faced opposition from the supervisory board and unions. The supervisory board has rejected the initial proposal, and unions, particularly IG Metall, have expressed concern over the lack of direct communication with workers. The German government has also weighed in, with a spokesperson from the Ministry of Economy emphasizing the need for responsibility towards workers.
Blume has softened his stance on potential plant closures, suggesting that there might be smarter solutions than shutting down facilities. The company is considering alternatives such as producing models developed with Chinese partners or incorporating defense industry activities to better utilize these facilities.
The context for these cuts is the competitive pressure Volkswagen is facing, particularly from Chinese manufacturers. The company is also focusing on electric vehicles and has seen some success with new models, such as the ID. Polo, which has received over 50,000 orders in its first four weeks of commercialization.
Blume has defended the cost-cutting measures, stating that the company's production costs in Germany have already been reduced by 20% over the past year. However, he believes more needs to be done to ensure the company's future competitiveness.
The company's strategy includes reducing the complexity of its model range, eliminating overlaps between brands like Volkswagen, Skoda, and Seat, and focusing on the most profitable models. Despite the job cuts and potential plant closures, Blume has highlighted the company's leadership in the European market for both combustion and electric vehicles.
The reaction from unions has been one of concern and frustration. The committee of employees has accused Blume of not providing enough information to the workforce and has called for more transparency. The German government has also expressed concern, with a spokesperson from the Ministry of Economy stating that any strategic decision must consider the responsibility towards workers.
In summary, Volkswagen is facing significant competitive pressures and is considering drastic measures to reduce costs and improve competitiveness. While job cuts and plant closures are on the table, the company is also exploring alternative solutions and focusing on its electric vehicle strategy. The reaction from unions and the government highlights the complexity and sensitivity of these decisions.
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