Volkswagen Chief Executive Oliver Blume announced a massive restructuring proposal to staff on Monday, warning that an additional 50,000 jobs could be eliminated worldwide to reduce the automaker's high overhead costs.
The announcement follows a decision last Thursday by the company's supervisory board to reject Blume's initial proposal to shut down four factories across Germany.
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The comprehensive realignment blueprint consists of 12 initiatives, roughly 150 pages, and 45 individual resolutions aimed at restoring the competitiveness of the automotive group.
Blume noted that he perceived broad support on the supervisory board regarding his assessment of the group's future requirements.
He promised to engage in constructive discussions with employees after workers staged protests at all Volkswagen, Audi, and Porsche sites throughout Germany last week.
"I can fully understand how deeply the current situation affects people within the company, as well as everyone in its immediate circle.
I have spent my entire professional life with the group," said Blume.
The automotive group has already shed 37,000 positions through voluntary redundancy and partial retirement packages out of an ongoing 2024 reduction program.
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"Since half of our overhead costs result from personnel costs, a theoretical calculation – assuming no change in labour costs – would result in the elimination of approximately 50,000 positions worldwide," said Blume.
The company is facing severe pressure from local competition in China and is aiming to scale back its global production from a pre-pandemic level of 12 million vehicles down to 9 million annually.
