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German car giant plans swingeing cuts across its business amid Chinese competition
Volkswagen chief executive Oliver Blume. The car maker plans huge cuts to its business.
Photograph: John MacDougall/AFP via Getty Imagesgroup chief executive Oliver Blume has said his firm’s “critical” struggle for survival mirrors a wider battle to secure an “industrial perspective” for Blume was speaking during whistle-stop visits of two VW plants facing closure as part of radical reforms at the German car giant to cut costs and 50,000 jobs, simplify production and future-proof the company against “The situation is more than critical,” Blume told assembled workers.
“We are outsized, often that makes us too slow and too complicated. ” He told wary employees in Emden, near the Dutch border, that VW production costs were up to 20 per cent higher than with competitors and that at least four plants had no guaranteed future beyond the end of the decade. I took a pay cut two years ago and it wasn’t put in writing. Can I demand it be restored?
AI companies are starting to sound desperate, and that’s not a good look Two plants – in Emden, and Zwickau in eastern Germany – are almost certain to close, according to VW sources, with additional plant closures likely at its Blume described closures as “always the last and most expensive solution”, but his ongoing lack of detail – and the resulting rumour mill – has been attacked by German unions and politicians.
“Our trust in this board, in particular the strategy of chief executive Oliver Blume, is damaged,” said Daniela Cavallo, head of the powerful VW works council and a member of the supervisory board. “Not irreparable damage, but damaged all the same. ”“You don’t build a future in withdrawing by degrees,” said Torsten Gröer, regional IG Metall head in VW’s hometown of Wolfsburg.
VW workers agreed that expectations of the first day of Blume’s roadshow – he visits other group plants before the end of the month – had not been met.
“It didn’t convince me that much,” said Oliver Jakobs, a mechatronic engineer. “There is too much smashed porcelain now. ” His colleague Jascha Luttmann said it was “not a good strategy to simply want to be the cheapest like in eastern Europe, that won’t work”. Blume not only failed to provide any concrete detail on the future car production, he also played down claims that some VW plants could pivot from civilian vehicles to arms production.
Instead of news on this front, he promised to cut every fourth management job to land at about 16,000 positions. Blume has flagged the need to cut about 50,000 jobs in total as part of a VW 2030 survival plan. The VW gloom was offset on Wednesday with news that German export sentiment had reached its highest level in more than four years.
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