Volkswagen CEO Oliver Blume said the carmaker can find 'smarter solutions' than shuttering factories, pushing back against reports of 100,000 job cuts and plant closures in Germany.
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Volkswagen AG CEO Oliver Blume said the carmaker can find "smarter solutions" than shuttering factories, pushing back against reports that a sweeping restructuring plan included as many as 100,000 job cuts and plant closures in Germany.
In an interview with Bild am Sonntag, Blume said VW trimmed costs at its German facilities by one-fifth on average last year, calling it "strong progress." He did not rule out further cuts but said the company would avoid plant closures.
"Our products are highly popular, we just aren't making enough money from them," Blume told the paper. "That is why we must continue to cut costs – in every area."
The comments come after details of the restructuring plan leaked to German media before a supervisory board meeting Thursday. The works council said Saturday there has been "a massive loss of trust" in Blume, accusing him of stoking fear in the workforce. The council said "virtually nothing" remains of the goodwill he earned after taking over in 2022.
Worker representatives hold 10 of the 19 seats on VW's supervisory board. Without their support, the CEO's restructuring plan faces an uncertain path. Local media reported that 12 of the 19 board members rejected the plan at Thursday's meeting.
Management outlined only vague goals after the board meeting, including an effort to reduce complexity across its product lineup and concentrate on the most attractive market segments.
"We are aiming to increase sales volumes per model, which is why we are systematically streamlining our product portfolio," Blume said in the Bild interview.
VW has been grappling with high labor and energy costs, bureaucratic burdens, increased competition and waning demand from China. US trade tariffs have also sapped returns at its luxury Audi and Porsche brands.
"The environment we operate in has never been as challenging or fraught with risk as it is today, with geopolitical tensions, trade barriers, regulations, market upheavals, and intense competition," Blume told Bild.
Blume will have to answer to staff at meetings scheduled after the summer break, the works council said.
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