Volkswagen CEO Thomas Schäfer admits the difficulties Europe’s leading automotive group faces in the transition to electric cars, telling union representatives, “We are no longer competitive.” “The situation is critical – he clearly underlines – We cannot move forward without significant cuts. We must address critical issues, including in personnel”.
Layoffs are imminent because the German company “cannot make enough profits to independently finance the transition to electric cars. Our factories are not productive enough and our costs are significantly higher than those of our competitors.” Schäfer later added that orders were “below our ambitious expectations, especially for electric cars.” Suffice it to say that electric vehicle sales in Europe increased by 52% in the third quarter of 2023, while Volkswagen recorded only a 34% increase in registrations. The situation is critical, but how many people could lose their jobs?
Volkswagen wants to reduce costs by $10 billion by 2026
An exact figure has not been given by the company’s senior management at this time; we only know that the group’s previous CEO, Herbert Diess, had in the past predicted cuts for around 30 thousand out of over 600 thousand units worldwide (230 thousand in 2009). Germany). In June, Volkswagen had already announced a mega restructuring plan to increase profit margins. Goal: To reduce costs by 10 billion by 2026.
But before he can fire Volkswagen, he will have to fight against the unions and the works council; a group of representatives elected by the staff who negotiate with management, the very person facing the company’s challenges that the CEO lists. It was stated that cost cuts will be made without layoffs and an agreement that guarantees jobs until 2029 will be implemented.
Continue reading on Today.it…
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
