BERLIN - Volkswagen CEO Oliver Blume has told employees that the German automaker may need to eliminate as many as 50,000 additional jobs worldwide if it fails to reduce overhead costs that remain far above those of its competitors.
In an internal interview posted on the company’s intranet, Blume said administrative and support functions at Volkswagen were still roughly 20 per cent more expensive than those at comparable automakers, German weekly Der Spiegel reported.
He warned that failure to close the gap could theoretically lead to the steep additional cuts, although he noted that the final number could be lower if other labour-cost reductions were achieved.
The warning comes on top of an existing plan to cut about 50,000 jobs across Volkswagen, Audi and other group brands by 2030.
Blume said the company was "well on track” to meet that target and expected to have achieved more than half of the reductions by the end of this year.
Volkswagen, Europe’s largest carmaker, has been grappling in recent years with sluggish demand, persistently high production costs in Germany, the negative impact of trade tensions with the US and fierce competition from Chinese electric vehicle makers.
Der Spiegel reported last week that the company intended to end vehicle production at four German factories, halting production at its Zwickau and Emden plants within five years, followed by its commercial vehicle plant in Hanover in 2032 and Audi’s plant in Neckarsulm in 2034.
The internal disclosures have drawn sharp criticism from labour representatives, who accused management of leaving workers in a state of uncertainty.
Volkswagen works council chief Daniela Cavallo said Blume "has obviously not considered it necessary for weeks” to inform "tens of thousands of completely unsettled, even frightened employees” about the core elements of the restructuring plan.
Last week, the IG Metall union staged protests at several Volkswagen plants and facilities across the country. - BERNAMA