2024-09-03 13:20:36
The VW board is considering job cuts and plant closures. One of the reasons: the situation in Germany.
Shock for VW employees: As part of a cost-cutting program, the company announces that it will cut jobs. This means that the 30-year-old employment guarantee is history.
The reasoning of CEO Oliver Blume is particularly striking: Among other things, he argues that the European car industry is in a “challenging and serious situation” and that new suppliers are entering the market. And then he talks about the home country of the Volkswagen Group: “In addition, Germany in particular is falling further behind in terms of competitiveness.”
Volkswagen must now “act consistently” in this environment, said Blume. In its announcement of the decision, the board had already explained that “a restructuring based solely on demographic developments” was no longer sufficient. “In the current situation, plant closures at vehicle production and component sites can no longer be ruled out without rapid countermeasures.”
Against this background, the company sees itself forced to terminate the job security that has been in place since 1994 “in order to achieve the structural adjustments necessary in the short term for greater competitiveness”.
According to “Handelsblatt”, up to four billion euros in additional savings are needed. “The headwind has become significantly stronger,” said brand boss Thomas Schäfer in a statement. “We therefore have to step up our efforts and create the conditions for long-term success.”
The core brand Volkswagen has been struggling with high costs for years and is far behind sister companies such as Skoda, Seat and Audi in terms of returns. A savings program launched in 2023 should bring about a turnaround here, improving earnings by ten billion euros by 2026. However, the currently weak new business has now further exacerbated the situation.
Video | Plant closures and layoffs threatened