KATHMANDU: Volkswagen CEO Oliver Blume has described the carmaker’s current situation as “more than critical” as the company faces growing pressure from Chinese automakers, US tariffs and excess production capacity in Europe.
Blume said Volkswagen and Germany’s wider auto industry are going through the “biggest upheaval” in their history. He is scheduled to meet employees at several Volkswagen plants to discuss the company’s restructuring plans, AFP reported.
Volkswagen is considering major cost-cutting measures, including up to 50,000 additional job cuts worldwide. The figure is not a confirmed target but represents the scale of reductions that could be needed to make the company more competitive.
The future of four German plants is also uncertain. Blume said Volkswagen currently sees no clear way for the Emden, Hannover, Zwickau and Neckarsulm sites to remain profitable in the 2030s.
However, Blume said closing factories would be a last resort. Volkswagen is exploring alternative uses for some facilities. The company is also in advanced talks with defense companies over possible industrial use of its Osnabruck plant.
Volkswagen is under pressure from rising competition from Chinese brands in Europe, weaker profits in China and US import tariffs. The company also faces excess production capacity of around 500,000 vehicles annually in Europe.
Blume has urged employees to support the company’s cost-cutting plan, saying Volkswagen needs major changes to remain competitive in the coming years.
