Volkswagen's Cost-Cutting Program

BERLIN (Reuters) – Volkswagen's planned cost-cutting program is essential to address "decades of structural problems" at the company, said CEO Oliver Blume in a recent interview.

Blume pointed out that weak market demand in Europe and reduced earnings from China highlight the ongoing issues at VW. The head of Volkswagen's works council disclosed plans to shut down at least three factories in Germany, resulting in tens of thousands of layoffs and downsizing of remaining plants, as part of a deeper-than-expected overhaul.

Although the carmaker has not officially confirmed these plans, it has requested workers to agree to a 10% pay cut to maintain jobs and competitiveness. Blume emphasized that operational costs in Germany hinder Volkswagen’s competitiveness and stated that "our costs in Germany must be massively reduced."

He clarified that while there was no flexibility in the cost-cutting goals, there could be variations in how to achieve them. Volkswagen has earmarked approximately 900 million euros ($975.06 million) in its annual report to implement these measures according to the newspaper.

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