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Image source: Bloomberg. |
In an interview earlier in November, Volkswagen’s CEO, Oliver Blume, revealed that cost-cutting measures had been planned by the group since mid-October. This is a necessary step to address the decades-long capital structure issues at Volkswagen’s factories.
“Declining sales, waning demand in Europe, and the gradual loss of market share in China further highlight the challenges Volkswagen has been facing in recent years,” Mr. Blume shared with Bild am Sonntag.
Previously, the head of Volkswagen also discussed plans to shut down three factories in Germany and lay off tens of thousands of employees. The remaining operational factories will also downsize their operations in Germany.
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The Volkswagen Tiguan. Image source: Volkswagen. |
Volkswagen is currently negotiating a 10% pay cut for its remaining employees as the only way to help the group save money and stay afloat. However, the rounds of talks between the brand and the labor unions have not yet reached a final conclusion.
“Volkswagen’s operating costs in Germany need to be significantly reduced,” added Mr. Blume.
According to Reuters, Volkswagen has spent over €900 million, equivalent to approximately 975.06 million USD, to restructure the entire group.
On October 30, Volkswagen’s financial report showed that profits for the first nine months had dropped to $14 billion, a 21% decrease compared to the same period in 2023. The group’s car sales also decreased by about 4% compared to the previous year.
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