Volkswagen CEO says 50,000 more job cuts may be needed to close competitive gap
By Rachel More
Volkswagen Faces Major Restructuring Amid Competitive Pressures
BERLIN, July 13 (Reuters) - Volkswagen may need to cut about 50,000 more jobs to match the competitiveness of rivals, its CEO told staff in an internal memo, effectively confirming for the first time that the automaker is looking to reduce up to 100,000 positions.
Challenges Impacting Volkswagen's Profitability
Oliver Blume is battling to streamline Europe's biggest carmaker, whose profits have slumped as its faces billions of euros in tariff costs, stiff competition in China and pressure on its German manufacturing network to become more efficient.
Current and Potential Job Cuts
After already agreeing 50,000 job cuts across the group, including its Porsche and Audi subsidiaries, the company must work on reducing costs further, having calculated a cost disadvantage versus comparable companies of 20%, Blume said in the memo seen by Reuters.
This means a "theoretical deduction" of another 50,000 jobs worldwide, the memo said.
Assessment and Feasibility of Adjustments
"We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible," Blume said in the document.
Response from Labour Representatives and Workers
The company had previously declined to comment on reports it was considering up to 100,000 job losses.
The memo follows angry calls from workers for management to explain its restructuring plans, which Blume presented to the company's supervisory board on Thursday.
Supervisory Board and Factory Closures
Sources familiar with the matter said labour representatives on the committee blocked the proposals, which were said to include job cuts and the possible closure of four factories.
Future of Underutilised Plants
"As of today, we still cannot confirm competitive use cases for the plants of Emden, Hanover, Zwickau and Neckarsulm in the 2030s," Blume said in the memo.
Alternative Solutions to Plant Closures
He said he preferred "intelligent solutions" to closures, having previously pointed to the defence industry or the production of Chinese Volkswagen models in Europe as options for underutilised factories.
(Reporting by Rachel More. Editing by Matthias Williams and Mark Potter)
