September 10, 2024 – This Sunday, the CEO of Volkswagen, Oliver Blume, defended the company’s plan for large-scale layoffs in the face of the current economic situation.
Blume stated unequivocally that the prevailing economic conditions are “so severe” that the old ways of doing business can no longer be replicated. He explained, “Car sales in Europe are declining, and new competitors from Asia are actively entering the market. The pie is getting smaller, but there are more guests at the table.”
He also revealed that the board is developing “further measures” to tackle the decreasing car sales, although he did not divulge any specific details. Despite these challenges, Volkswagen remains “steadfastly committed” to staying in Germany. Blume emotionally noted, “We have employees whose grandfathers worked for Volkswagen, and I hope their grandsons will also work here.”
The background to this situation is Volkswagen’s consideration to shut down its German plants as a response to overcapacity and diminishing competitiveness, thereby cutting expenses. If this decision is finalized, it will be the first time in Volkswagen’s 87-year history that it closes a German factory.
CFO Arno Antlitz addressed employees at a meeting in Wolfsburg on the 4th of this month, stating that European car demand has not recovered since the pandemic. He elaborated, “Car deliveries in the entire European region have shrunk by approximately 2 million vehicles compared to the peak. Volkswagen has lost about 500,000 car sales, equivalent to the production capacity of roughly two factories. Therefore, we need to further reduce costs and enhance productivity.”
