VW tells workers to brace for job cuts in savings push

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Volkswagen AG signalled it’s willing to push for staff reductions at its namesake brand to reduce expenses and improve profitability.

Next year will be difficult for VW because of intense pressure in several markets and below-expectation orders for its electric vehicles, brand chief Thomas Schäfer said Nov. 27.

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“‘Business as usual’ will not be enough without noticeable cuts,” Schäfer told labour representatives at the main Wolfsburg plant, according to internal documentation of the comments seen by Bloomberg. “We have to tackle the critical issues, including personnel.”

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Europe’s biggest automaker is working on a program to lift returns and better compete with rivals such as Stellantis NV and Tesla Inc., with wilting demand in Europe and China adding urgency to efforts to slim down bloated structures.

Chief executive Oliver Blume wants the long-struggling VW brand to deliver a sustained gain in earnings of about €10 billion (US$10.9 billion) by 2026. Success will partly depend on forging agreements with the company’s powerful labour unions.

The brand needs to bring down excessive administrative costs and make its factories more productive, Schäfer said, adding that an agreement on the necessary measures should be found this year.

“We are not making enough profit with our cars to finance the transformation and our future from our own resources,” he said. “Other manufacturers would close plants in such a situation.”

More details on the efficiency measures are expected to be communicated at a workers’ assembly on Dec. 6. Volkswagen must make maximum use of partial retirement and other retirement options in the coming years, Gunnar Kilian, a board member responsible for personnel, said at the same event.

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Der Spiegel and Handelsblatt reported the comments earlier Monday.

Bloomberg.com

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