“Current Situation Serious”: VW CEO Tells Workers Labor Cost Reduction Urgent To “Secure Future” 

Volkswagen CEO Oliver Blume addressed thousands of workers at the company’s Wolfsburg headquarters, emphasizing the urgent need to “secure the company’s future” amid a vicious downturn in the auto industry and intensifying competition.

According to The Wall Street Journal, Blume stated that the German auto giant has been streamlining operations and incorporated new synergies but still faces a bumpy road ahead. He added that reducing labor costs is needed.

“The current situation is serious. New competitors are entering the market with unprecedented force. The price pressure is immense,” the CEO told workers on Wednesday. 

He added, ”In addition, our labor costs in Germany have now become too high. That is why urgent measures are needed to secure Volkswagen’s future.”

In late October, Volkswagen’s top labor leader, works council chief Daniela Cavallo, who also sits on VW’s supervisory board, was quoted by Bloomberg as saying three factories were preparing for closure, and VW was mulling over eliminating thousands of jobs and scaling back pay by 10% and hours. 

Earlier this week, WSJ noted that 100,000 workers, or about 33% of the company’s total German workforce, staged a labor action across nine factories amid plant closure and mass layoff threats.

We’ve been extensively covering the dire situation unfolding at VW this fall: 

• Sept. 03: Volkswagen Considers First-Ever Germany Factory Closures As Economic Troubles Mount

• Sept. 10: Volkswagen Declares War On Unions, Scraps Three-Decade-Old Job Protections

• Sept. 23: VW Could Cut Up To 30,000 Employees In Germany

• Sept. 27: Volkswagen Cuts Profit Forecast Again Amid Sliding Car Demand

• Oct. 28: “This Is Starvation”: VW Union Head Warns 3 Plants Closing, Thousands In Layoffs, Amid Auto Crisis

Also on Wednseday, works council Cavallo told workers, following Blume’s message, that severe headwinds plague VW and the entire auto industry. She hoped for a solution by VW that does not involve factory closures and job cuts

“We want to bring this to a good end before Christmas,” she told workers.

In markets, VW shares in Germany were down 27.5% on the year, trading around 2010 lows.

Implementing restructuring in the weeks before Christmas would be an absolute PR nightmare. Perhaps these cuts are planned for the start of the new year.