Volkswagen’s upcoming cost-cutting measures are essential to address “decades of structural issues” within the German automaker, CEO Oliver Blume shared in an interview with Bild am Sonntag.
“The sluggish market demand in Europe and substantially lower profits from China highlight long-standing structural challenges at VW,” Blume told the publication on Sunday.
Volkswagen’s works council chief announced last Monday that the automaker is considering closing at least three factories in Germany, reducing staff by tens of thousands, and downsizing other plants across Europe’s largest economy as part of a more extensive overhaul than anticipated.
Although Volkswagen has not officially confirmed these plans, it requested its employees to accept a 10% salary reduction on Wednesday, claiming this as the only way to secure jobs and maintain competitiveness within Europe.
Blume emphasized that Germany’s high operating costs are a significant burden on Volkswagen’s global competitiveness, stating, “Our costs in Germany need to be drastically lowered.”
According to the CEO, while there is some flexibility regarding the approach, the cost-cutting objectives are non-negotiable.
The carmaker has earmarked approximately 900 million euros (around USD 975 million) in its annual budget to implement these restructuring steps, as reported by the paper.