Volkswagen's supervisory board has approved a restructuring plan that will cut around 50,000 jobs group-wide and could close plants, after months of talks with unions and the state of Lower Saxony. The carmaker called it the most far-reaching transformation in its history and aims to lift its operating margin to 9% by 2030.
Volkswagen will cut around 50,000 jobs across the group, including management positions, under a restructuring plan its supervisory board approved late Thursday. The overhaul follows months of negotiations between management, unions and the state of Lower Saxony, a large minority shareholder that can block key decisions.
VW called the plan the most far-reaching transformation programme in its history. The move builds on an earlier proposal from chief executive Oliver Blume that could have cut up to 100,000 jobs and closed as many as four plants. It is not yet clear whether the new 50,000 figure comes on top of 50,000 jobs already agreed with unions in 2024; VW could not immediately be reached for comment.
Excess capacity behind the cuts
The supervisory board acknowledged that VW has excess production capacity of 500,000 vehicles in Europe, and that plants in Emden, Zwickau, Hanover and Neckarsulm have no competitive follow-on production over the next five to eight years. According to the company: "In parallel, alternative uses for these plants are being explored".
VW, one of Germany's biggest industrial employers, has been squeezed by rising competition from Chinese carmakers, US tariffs and weak car sales in its home European market since the pandemic. The company said a further fundamental reduction of global staffing levels was essential.
Margin target and model cuts
The carmaker is seeking to lift its operating margin to 9% by 2030, up from just 3.8% in the first half of this year. To get there, VW plans to axe one in two models over the coming nine years, reducing complexity and lowering unit costs on the models that remain through higher economies of scale.
Source: Financial Times
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