FRANKFURT (AFP) – Volkswagen (VW) is considering closing several plants in Germany as the ailing auto giant pursues a drastic cost-cutting plan, a media report said yesterday.
Workers’ representatives will update VW staff at all 10 German plants about management’s latest savings proposals, with many bracing for news of thousands of job cuts.
Volkswagen Chief Executive Officer Oliver Blume is seeking around EUR4 billion (USD4.3 billion) in cost savings at the group’s VW brand, according to the Handelsblatt financial daily, citing company sources.
To achieve that, VW could close several factories in Germany – a first in the company’s 87-year history.
The plans are likely to meet with anger from workers’ representatives, who have accused VW’s leaders of mismanaging the 10-brand group and putting profits above building a sustainable future for the manufacturer.
Volkswagen stunned employees in September when it said it was in need of a deep restructuring and was considering significant job cuts as well as shuttering plants on its home turf.
VW’s powerful works council and union bosses have vowed to put up strong resistance against the plans.
But VW argues the cuts are necessary as it struggles with high production costs, a stuttering switch to electric vehicles and rising competition in key market China.
Rival carmakers in Germany’s flagship industry are facing similar headwinds, contributing to a wider downturn in Europe’s largest economy.
Volkswagen recently cut its 2024 outlook and is due to publish third-quarter results tomorrow, which are expected to disappoint.
Also tomorrow, Volkswagen will begin a second round of wage talks with the IG Metall union. The union has asked for a seven-per-cent pay rise, which Volkswagen bosses have rejected.
