A Volkswagen announced plans to potentially close two of its factories in Germany and finish job security programs as part of a broader cost reduction plan.
The move comes in response to growing economic challenges, including the declining competitiveness of the German economy.
Oliver BlumeCEO of VW Groupcited adverse economic conditions as a significant factor behind the decisions.
Thomas Schaeferbrand manager VWstated that the company’s strained financial situation requires more than simple cost-cutting measures and announced the need to cut €10 billion (US$ 11.07 billion) until 2026.
“The situation is extremely tense and cannot be overcome with simple cost-cutting measures,” he explained in a statement.
The company’s works council, which represents employees’ interests, has vowed to strongly resist the proposed plans, denouncing the planned obsolescence of a major vehicle plant and a components factory.
Daniella Cavallohead of the Works Council, criticized management for past decisions such as inadequate investment in affordable hybrid and electric technologies.
Cavallo drew attention to the excessive complexity and ineffective practices within the company, calling for a reduction in complexity and better use of brand synergies.
The news comes at a difficult time for the German economy, already impacted by high energy costs and geopolitical challenges, including sanctions against Russia, which Russian President Vladimir Putin said have hit Germany the hardest.
German Chancellor Olaf Scholz faces additional pressure after unfavorable results in recent regional elections.
Volkswagen shares rose 2.57% on Monday, reflecting a mixed market reaction to the company’s announcement.
Source: https://www.ocafezinho.com/2024/09/03/volkswagen-entra-em-colapso-na-alemanha-e-cogita-fazer-demissoes-em-massa/
