LONDON (Reuters) – Carmaker Volkswagen plans to close at least three plants in Germany, lay off tens of thousands of employees and reduce its remaining factories in Europe’s largest economy, its head said on Tuesday, as it plans a deeper overhaul than expected. Monday.
Here are some reactions to the news:
Volkswagen CEO Thomas Schäfer:
“We’re not making enough money from our cars right now. At the same time, our energy, material and employee costs have continued to rise. This calculation can’t work in the long term.
“So we have to get to the root of the problem: we are not producing enough productivity at our German sites, and our plant costs are currently 25-50% higher than we had planned. This means that the cost of individual German plants is twice as much as German factories.” Quiz.
“In addition, at Volkswagen we still handle many tasks internally that competitors have already outsourced more cost-effectively. This means that we cannot continue as before. We must quickly find a common and sustainable solution for the future of our company.” “
German government spokesman:
“It is known that Volkswagen is in a difficult situation. (…) The Chancellor’s position is clear on this matter, which is that potentially wrong management decisions from the past should not be at the expense of employees. It is now a question of preserving and securing jobs.”
Stifel analyst Daniel Schwartz:
“The plans go well beyond market expectations. I believe this reflects a unique combination of unfavorable factors: competition in China, weak demand in Europe, especially for battery electric vehicles, and stricter regulations.”
“Of course, the unions will disagree with the proposed measures. However, I find it encouraging that the unions seem to largely agree with the analysis that Volkswagen needs to take significant action.
“I think strikes are possible: one side is asking for a 7% pay rise, while the other side is offering a 10% pay cut plus factory closures.
“It will not be easy to find a compromise. It will be interesting to see whether the unions will limit strikes to VW brand factories (where the damage may be less for VW) or will also expand this to other brands, such as Porsche, where “The damage will be more significant.”
(Reporting by Reuters; Reporting by Josephine Mason and Christoph Stetz; Editing by Susan Fenton)
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