Volkswagen may cut up to 100,000 jobs and reduce, then fully halt, production at a number of plants.
The company declined to comment on reports of a management presentation at a supervisory board meeting where a sweeping cost-cutting program was allegedly discussed. If these plans are implemented, Volkswagen would effectively double the staff cuts it had previously announced.
The automaker, which owns Audi, Bentley, Skoda, Seat and Cupra, currently has more than 650,000 employees. The company has come under heavy pressure because of growing competition from Chinese manufacturers and difficulties in the transition from cars with internal-combustion engines to electric vehicles.
A Volkswagen representative said the company would not “pre-empt the process,” since it concerns sensitive negotiations with employees and unions.
At the same time, he pointed to the already widely discussed problems facing traditional automakers, which have to compete with more agile Chinese companies. Those companies have significantly strengthened their position in Europe in the market for electric vehicles, and then plug-in hybrids.
“It is true that the entire automotive industry and the Volkswagen Group are going through a profound transformation. The executive board has repeatedly stated that our current business model no longer works for all brands: developing cars in Germany, producing them in Europe and exporting them around the world. Over the past few years, the world has fundamentally changed,” the company representative said.
According to Germany’s Manager Magazin, a deepening of the reform under CEO Oliver Blume will be discussed at a supervisory board meeting next month.
Blume had earlier announced a strategy involving €11 billion (£9.49 billion) in cost cuts.
On Friday, a Volkswagen representative cited tariffs, competition and “stagnating, and sometimes shrinking” markets, which could put pressure on the company amounting to tens of billions of euros a year.
According to the magazine, the current proposals, which could still be softened, envisage the closure of four plants in Germany over the medium term. Among them are Audi’s site in Neckarsulm, as well as Volkswagen plants in Hanover, Zwickau and Emden.
These cuts are significantly larger than those the company announced in 2024.
Volkswagen says that, to survive under the pressure of new competition, the company must adapt, and this requires a “sharper focus” on costs and investment.
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