Volkswagen Earmarks €16 Billion for Job Cuts and German Plant Closures
Volkswagen’s Landmark Restructuring Plan
BERLIN, Sept 10 (Reuters) - Volkswagen estimates the total cost of job cuts and potential plant closures, part of a landmark restructuring pact struck last week, at around €16 billion ($18.6 billion), a person familiar with the matter said on Thursday.
The German carmaker, Europe's largest, has embarked on its biggest ever restructuring, citing an existential battle against competition from China, biting tariffs and overcapacity.
Scope and Impact of the Restructuring
The plan includes exploring alternatives for four German plants that will eventually run out of models during the next decade and a reduction of around 50,000 more positions than previously planned.
Plant Closures and Associated Costs
A Volkswagen spokesperson declined to comment on the costs, which were first reported by German magazine Der Spiegel.
The source told Reuters that phasing out production in Emden and Zwickau would cost about €1 billion each, while €2 billion each would be incurred at the Neckarsulm and Hanover plants.
Job Cuts and Financial Allocation
About €10 billion would be set aside for costs related to cutting up to 60,000 jobs worldwide.
Exchange Rate and Reporting Credits
($1 = 0.8595 euros)
(Reporting by Christina Amann, writing by Miranda Murray and Christoph Steitz, editing by Sabine Wollrab and Thomas Seythal)
