Volkswagen: Company cuts costs, likely closure of plants in Germany
Volkswagen does not rule out plant closures, including in Germanywhile a large-scale restructuring plan is underway with consequent cost cutting to make the brand more competitive and sustainable in the long term. The carmaker reported this, with the works council ensuring “strong resistance” to the plans of the general management. In a note, Volkswagen It says it is forced to end its job security program in place since 1994explaining that all measures will in any case be discussed with workers’ representatives.
Faced with an “extremely tense situation,” Europe’s largest automaker Volkswagen will have to restructure its operations and does not rule out plant closures in Germany, the internal document says. “Germany is increasingly losing ground in terms of competitiveness,” it reads. And again: “The closure of plants at vehicle and component production sites can no longer be ruled out”. In this note, Oliver Blume, CEO of the group, believes that Volkswagen “must now act decisively”, at a time when “the European automotive industry is in a very challenging and serious situation”. The news was welcomed by the stock markets, with the price of Volkswagen shares jumping almost 3% on the Dax.
Volkswagen is suffering from declining sales, a weakening automotive sector and growing competition from Chinese manufacturers, especially in its main market, the country of the Dragon. Last year Volkswagen launched a comprehensive restructuring program. “But the situation is extremely tense and cannot be resolved with simple cost-cutting measures,” Volkswagen management emphasizes in the document. The subsidiary union IG Metall denounced in a press release an “irresponsible” plan that “shakes the foundations of Volkswagen and massively threatens jobs and construction sites.”
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