Volkswagen could cut 140,000 jobs
Several models, including Polo, could be axed as German auto giant succumbs to cost pressuresThe News
Volkswagen CEO Oliver Blume has warned staff the carmaker could soon cut a further 50,000 jobs – on top of the 50,000 already announced – as the company battles rising costs, falling profits and intensifying global competition.
The Key Details
- Volkswagen Group to cut 50,000 jobs
- Another 50,000 positions are being assessed
- With another 40,000 jobs at risk if factories close as predicted
- CEO Oliver Blume says Volkswagen faces a 20% cost disadvantage compared to rivals
- Reports of model cuts, including Porsche Taycan, Audi Q5 Sportback and VW Polo
The Finer Details
According to Reuters, VW staff received the news via an internal memo from Blume, with around 100,000 jobs thought to be on the line in the short term, while another 40,000 jobs could be lost in the coming years as factory shutdowns are considered.
Having already committed to cutting some 50,000 jobs across the wider VW Group – including Porsche and Audi – Blume said more action may be required to restore the company's competitiveness after it calculated a cost disadvantage of around 20 per cent compared other auto makers.
Citing a “theoretical deduction” of another 50,000 jobs worldwide, the document issued by Blume said: "We are currently assessing across all brands, companies and regions how many adjustments are actually necessary and feasible".
It comes amid mounting financial pressures, including billions of euros in tariff costs and slowing profits, along with fierce competition from China and efficiency challenges at several of its manufacturing sites in Germany.
The latter could also spell the end for at least four of its German factories – Emden, Hanover, Zwickau and Neckarsulm – which Blume said might not have a “use case” in the 2030s.
The CEO said he preferred “intelligent solutions” over closures, according to the report, with plans already locked in to reduce its current production capacity and halve its current model lineup.
"Of course, it's understandable that not everything has been planned ?out down ?to the last detail yet, and that certain issues still ?need to be further discussed and evaluated," Blume said in the memo.
"There will certainly be more meetings in which we ?will work hard to find the best solutions."
Those discussions are set to include the future of popular models, including the VW Polo, Audi Q5 Sportback, Skoda Fabia and Kamiq, and several Porsches including the Taycan, Panamera, Cayenne Coupe and 718 – all of which could soon be axed according to German newspaper Bild.
Volkswagen is yet to confirm official model cuts at the time of writing.
The Road Ahead
Blume has previously pointed to better ways to utilise its current manufacturing facilities, including supplying the defence industry or building Volkswagen's Chinese-market vehicles in Europe, however their fate remains unclear.
Volkswagen is expected to continue negotiations with labour representatives as it refines its global restructure.
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