Volkswagen CEO warns of critical situation before job-cut talks

Volkswagen is in a more than critical situation, Chief Executive Oliver Blume said ahead of meetings with employees to defend the carmaker’s cost-cutting plans, ERR reported on Sunday.

In an interview posted on Volkswagen’s internal network and sent to AFP, Blume said Volkswagen and the entire German car industry faced the biggest upheavals in their history because of global economic difficulties and competition from China.

The carmaker is considering major job cuts. In the coming days, Blume is due to meet employees at Volkswagen’s headquarters in Wolfsburg and at its plants in Zwickau and Emden to explain the company’s plans.

Blume said no decision had been made to close plants. However, he repeated Volkswagen’s position that it currently saw no way for its plants in Emden, Hanover, Zwickau and Neckarsulm to remain profitable in the 2030s.

The company must also address annual overproduction of 500,000 vehicles in Europe, he said.

Plant closures would always be the last and most expensive option, Blume said. In plants where car production could end, Volkswagen is examining other industrial uses. He pointed to advanced talks with defence companies about using the Osnabrueck plant.

Blume presented his cost-cutting plans to Volkswagen’s supervisory board in July, but no decision was made. German media reported at the time that the government of Lower Saxony, Volkswagen Group’s largest shareholder with 20 percent of the voting rights, had refused to approve the plans.

The group has already announced the loss of 50,000 jobs. Blume said agreements had been reached with 37,000 employees.

Blume urged employees to make sacrifices for the carmaker.

“We will be successful only if everyone in the company supports this plan,” he said.

Christiane Benner, head of the IG Metall trade union, sharply criticised management on Friday and pledged to oppose plant closures.

“Volkswagen employees have already had to accept major and painful cuts and are now being hit in the face again,” Benner told the weekly Wirtschaftswoche.