Volkswagen CEO Implements Austerity Measures Amid Profit Decline
Volkswagen Group CEO Oliver Blume has announced stringent austerity measures aimed at strengthening the automaker's competitive position in the market. In an interview with the German newspaper "Bild am Sonntag," Blume emphasized that there is no alternative to these tough measures, stating, "The goal of controlling costs and capabilities is there." He noted that costs in Germany are excessively high, with labor costs often exceeding double the average in other European locations.
Potential Factory Closures and Layoffs
Recent reports suggest that Volkswagen may close at least three factories in Germany, which could lead to the layoff of tens of thousands of employees. The company is currently negotiating wage reductions, seeking a potential 10% cut for some employees, with others facing cuts as high as 18%. This comes in light of a staggering 64% decline in profits compared to the previous year, primarily attributed to weak sales in the Chinese market.
Declining Investment in Germany's Industrial Sector
The situation is further complicated by a report from the German Chamber of Commerce and Industry, indicating that a significant portion of German companies plan to reduce investments domestically. The study revealed that only 19% of industrial companies view their current situation as positive, while 35% describe it as negative. This trend raises concerns about the future of industrial investment in Germany as Volkswagen navigates these challenging economic conditions.
