The cost reduction program planned by Volkswagen it is inevitable to remedy “decades of structural problems” at the German automaker, the company’s chief executive, Oliver Blume, said in an interview published Sunday.
“Weak market demand in Europe and significantly lower profits from China reveal decades of structural problems at VW”Blume told the Sunday newspaper Bild am Sonntag.
The head of the Volkswagen works council said on Monday that the automaker plans to close at least three factories in Germany, lay off tens of thousands of employees and reduce its remaining plants in Europe’s largest economy, amid a deeper-than-expected review.
The automaker has not confirmed these plans, but requested on Wednesday its workers to accept a 10% pay cut, arguing that it is the only way Europe’s largest car maker can save jobs and remain competitive.
Blume told Bild am Sonntag that the cost of operating in Germany is a major drag on Volkswagen’s competitiveness. so “our costs in Germany must be reduced massively.”
There is no flexibility in cost reduction objectives, only in the way of achieving them, he noted.
The company has reserved about 900 million euros (US$975.06 million) in its annual report to execute the measures, according to the newspaper.
