A Volkswagen executive warns that up to 100,000 jobs could be cut in the restructuring.
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Volkswagen's leadership is warning that the company may need to cut another 50,000 jobs to compete with auto industry rivals, according to an internal report sent to employees.
The German automaker earlier announced plans to cut 50,000 jobs across the company, including at its Porsche and Audi subsidiaries, and CEO Oliver Blume said in a memo reviewed by Reuters that more cuts are needed because Volkswagen is operating at a 20% leaner rate than its rivals.
The memo said the move meant “anticipated cuts” to another 50,000 jobs worldwide, confirming earlier reports that Volkswagen was considering up to 100,000 job cuts.
“We are currently assessing across brands, companies and regions how many changes are necessary and feasible,” Blume said in a memo, according to Reuters.
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Volkswagen is weighing 50,000 job cuts on top of previously announced layoffs of 50,000 workers as part of a restructuring effort. (Elijah Nouvelage/Getty Images)
Volkswagen is Europe's biggest carmaker but has seen its profits fall amid higher tax costs, tougher competition in the Chinese market and pressure on its German production network to be efficient.
Blume said in the memo that he prefers “intelligent solutions” to plant closures, and previously suggested that underutilized factories could be used for the defense industry or to produce China's Volkswagen brands in Europe.
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| A ticker | Security | Finally | Change | change % |
|---|---|---|---|---|
| VWAGY | The company VOLKSWAGEN AG | 8.236 | +0.03 |
+0.32% |
He said in the memo that looking at the next ten years, the company “still cannot guarantee the use cases of the Emden, Hanover, Zwickau and Neckarsulm plants in the 2030s.”
The company's leaders faced the anger of the workers when the company's management explained its restructuring plans, which Blume presented to the board of directors on Thursday.
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Volkswagen is looking to halve its model lineup amid a major restructuring push. (Eva Marie Uzcategui/Bloomberg via Getty Images)
Reuters reported that sources familiar with the matter say that the workers' representatives on the committee have blocked proposals that are said to include job cuts and the closure of four factories.
Volkswagen's statement after the meeting with stakeholders did not address the issue of job cuts or plant closures but instead announced plans to reduce production capacity and gradually reduce its model range.
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“Yes, it is understood that not everything has been planned until now, and that there are some issues that still need to be discussed and considered,” said Blume in his message to the employees. “Of course there will be many meetings where we will work hard to find the best solutions.”
Reuters contributed to this report.
