Written by Cláudio Afonso | LinkedIn | X
Volkswagen’s planned cost-cutting program was “unavoidable” to address longstanding “structural problems”, CEO Oliver Blume said in an interview with the German paper Bild am Sonntag.
Last week, the company’s works council chief, Daniela Cavallo, revealed that VW is considering shutting down at least three German plants, cutting tens of thousands of jobs, and downsizing its remaining operations in Germany.
“The weak market demand in Europe and significantly lower earnings from China reveal decades of structural problems at VW,” Blume told Bild am Sonntag.
The company’s “costs in Germany must be massively reduced,” the executive added.
The auto giant has yet to confirm the plans, but workers were asked last week to accept a 10% pay reduction. Volkswagen has earmarked around €900 million ($975.1 million) for the cost-cutting program, according to Bild am Sonntag.
Founded in 1937, Volkswagen became the world’s largest carmaker by revenue in 2023, generating over €320 billion ($348 billion) and delivering more than nine million vehicles worldwide.
Over the last decade, the automaker has invested millions annually in sports sponsorships, an investment that can now be at risk as VW is forced to reduce costs.
In the wake of the emissions scandal about ten years ago, Volkswagen allowed some sponsorship deals with German clubs, including Schalke 04 and 1860 Munich.
Written by Cláudio Afonso | LinkedIn | X
