Volkswagen CEO Says Firm Can’t Avoid Job Cuts, Plant Closures, Restructuring Should Be Complete In 3-4 Years

The CEO noted that majority of these layoffs could be executed via normal attrition and early retirement. At the same time, he stressed that this would not be sufficient for the firm to fix the issue

The brand head said that to cut down €4 billion in costs, the firm has to take these steps.

Source : Volkswagendealer

Volkswagen CEO, Thomas Schaefer, on Saturday said that the automaker sees no chance of avoiding job cuts and plant closures. The brand head said that to cut down €4 billion in costs, the firm has to take these steps.

Speaking with weekly Welt am Sonntag, the executive said that the automaker needs detailed solutions to combat its issues. “Ultimately, any solution must reduce both overcapacity and costs. We can't just stick a band-aid on it and keep dragging it along. That would come back to bite us later in a serious way,” he noted, reported Reuters.

These comments come as the company’s dispute with workers escalates and these are expected to make the situation worse. Notably, the workers have threatened the carmaker with strikes from December and have called the firm to provide solutions in current negotiations regarding pay and capacity that exclude factory closures and major job cuts.

The CEO noted that majority of these layoffs could be executed via normal attrition and early retirement. At the same time, he stressed that this would not be sufficient for the firm to fix the issue. The company is yet to disclose the exact details of the expected job cuts.

Regarding a timeline for the restructuring, Schaefer said that it should be done withing 3-4 years. “It would simply take too long. There is no point in delaying restructuring until 2035. By then, our competition would have left us behind,” he noted.

In addition to reductions in the workforce, the firm has also asked workers at the VW AG unit, which is at the centre of the current conflict, to take a 10 per cent cut in their wages. The CEO said that there was no hope regarding a recovery in demand in Europe at the moment. He pointed out that labour costs in the company’s sites in Germany were nearly twice as high in comparison to those of its peers and the automaker’s sites in southern and eastern Europe.