Volkswagen CEO: "Beyond Serious Level," Restructuring to Be Discussed at September Board Meeting

*This content was translated by AI.

Volkswagen CEO Oliver Blume stated in an internal memo sent to employees on August 21 that the current automotive industry situation has "gone beyond a serious level." Blume warned that difficulties will intensify over the coming years.

Volkswagen, Europe's largest automaker, plans to undertake its largest-ever restructuring to maintain competitiveness and financial stability. This restructuring includes significant cost reductions, potential additional layoffs of up to 50,000 employees, and possible spin-offs of certain business units.

Volkswagen CEO Oliver Blumefaces multiple pressures, including the accelerated entry of Chinese automakers into the European market, declining profits in China, increased U.S. import tariffs, high production costs in Europe, and overproduction.These factors are placing a heavy burden on the company's profit margins, he said.

Blume noted that the current operating profit margin of nearly 4% is relatively robust given the circumstances. However, he pointed out that it would be insufficient to fund long-term investments in new technologies, products, and production facilities.

The Volkswagen board is scheduled to reconvene on September 4 to discuss the restructuring plan. The company has not yet officially confirmed the scale of additional layoffs. Earlier reports indicated that if the plan for 50,000 additional job cuts materializes, the total number of layoffs across the group could double.

Blume emphasized that the figure of 50,000 global job cuts is not a finalized target but rather an estimate based on benchmarking competitors' cost structures to determine the necessary scale of measures.

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*This content was translated by AI.