Volkswagen desires to drastically tighten austerity measures – plant closures are apparently being mentioned | EUROtoday

According to a media report, Volkswagen boss Oliver Blume desires to tighten the corporate’s austerity measures. By the tip of 2028, prices throughout the group are to be diminished by 20 p.c, reported “Manager Magazin”, citing info from the corporate.

Blume and CFO Arno Antlitz introduced this to the Wolfsburg carmaker’s 120 high executives in mid-January. Factory closures may be underneath dialogue. The firm declined to remark. When the 2025 steadiness sheet is offered on March tenth, Blume will present details about the present standing of efforts to decrease prices which have been ongoing for years. Since the plan for better profitability was adopted in 2023, financial savings amounting to tens of billions have been realized throughout the group.

The cause for the following step is issues about returns in view of the stoop in China, the US customs coverage and the tough aggressive setting, as “Manager Magazin” reported. ‌Blume was quoted as saying: “We have to lower the break-even point.” The financial savings goal of 20 p.c is “the ambition” and applies to all manufacturers and price sorts. This would correspond to a quantity of round 60 billion euros.

In the previous two years, the group has achieved financial savings totaling 33 billion euros. The group’s high administration had already referred to as for continued austerity measures at a administration assembly in December, citing the tougher market setting.

Works council attracts crimson traces

The group’s works council took the report as a possibility to seek advice from the settlement between the union and the corporate on the finish of 2024. “We are aware that we are still in a difficult situation with the group,” works council head Daniela Cavallo is quoted as saying in an info despatched to staff accessible to the Reuters information company. That’s why every little thing was put in place again then to enhance competitiveness and make the influence on the workforce socially acceptable. The pact ⁠gives for the discount of 35,000 jobs in Germany between 2025 and 2030. Factory closures and redundancies for operational causes have been excluded. “With us there will be no factory closures,” emphasised Cavallo.

According to the report, the DAX group is underneath monetary strain. The score company S&P lowered the outlook for Volkswagen to “negative” shortly earlier than Christmas and identified the danger that the automobile producer might miss the monetary indicators related to its score. CFO Antlitz subsequently raised the not too long ago introduced six billion euros in liquid belongings, together with by the sale of receivables. In an inside interview, Antlitz defined that the group had achieved a return of three p.c in 2025. This isn’t a sustainable, strong degree of outcomes and is just too little to have the ability to make investments vigorously. “The restructuring must continue to be pushed forward decisively,” the CFO defined to the staff.