Car industry Report: VW could cut up to 30,000 jobs
Will there be massive job cuts at Europe's largest car manufacturer VW? According to a report in "Manager-Magazin", the ailing company could cut up to 30,000 jobs in Germany in the medium term. The company did not confirm the figure.
19.09.2024, 17:47
SDA
According to the magazine's information, CFO Arno Antlitz wants to cut funds for investments to 160 billion euros over the next five years. Most recently, VW had budgeted 170 billion euros for its medium-term planning from 2025 to 2029.
The state of Lower Saxony is the second-largest VW shareholder with 20 percent of the voting rights.
Spokesperson: No confirmation, but Volkswagen must make savings
A spokeswoman for Volkswagen AG in Wolfsburg said: "One thing is clear: Volkswagen must reduce its costs at its German sites." This is the only way the brand can earn enough money to invest in the future.
"How we achieve this goal together with the employee representatives is part of the upcoming talks," she said. She did not confirm the figure of 30,000 jobs. VW will start negotiations with IG Metall on September 25.
VW is struggling with high costs in its core brand VW Passenger Cars. The car manufacturer has terminated the decades-old job security agreement with the trade unions in Germany, and plant closures and compulsory redundancies are under discussion.
Brand boss Thomas Schäfer wants to raise the operating return on sales to the target level of 6.5 percent in the coming years.
Report: Group CEO Blume considers the "hardliners'" target to be realistic
The pressure is obviously so great that far-reaching cuts to the workforce are to be put on the table. According to "Manager Magazin", hardliners want to reduce the number of jobs in Germany from 130,000 by 30,000 in the medium term.
Group CEO Oliver Blume also considered this to be realistic in the long term in a small circle. His predecessor, Herbert Diess, had already met with fierce resistance with ideas for job cuts of this magnitude - and had to scrap the corresponding plans.
Red pencil mainly for research
According to the magazine, research and development could be particularly hard hit. According to some forecasts, 4,000 to 6,000 of the approximately 13,000 employees in Germany would have to take their hats off. Partial retirement and redundancy payments would not be sufficient measures.
As part of its investment planning, VW had already announced that it would have to spend a lot on new technology, drives, batteries and software in the years 2023 to 2024 - after which the investment ratio would fall again.
Last year, 13.5 percent of turnover in the car business was spent on property, plant and equipment as well as research and development, around 36.1 billion euros.
This year, CFO Antlitz has so far budgeted 13.5 to 14.5 percent of revenue for this purpose. Blume promised investors last year that the ratio would be below 11 percent in 2027 and even fall to around 9 percent in 2030. Investors have been complaining about the high expenses for years because they also reduce the financial scope for distributions to shareholders.
