A VW Golf GTI stands in a car park within view of the brand name tower on the premises of the VW plant in Wolfsburg.
Picture Alliance|Picture Alliance|Getty Images
German carmaker Volkswagen on Monday advised it will certainly no more have the ability to eliminate plant closures in the nation, mentioning the specter of significant cost-cutting procedures in order to “future-proof” the business.
“The European automotive industry is in a very demanding and serious situation,” Volkswagen Group CHIEF EXECUTIVE OFFICER Oliver Blume stated in a declaration.
“The economic environment became even tougher, and new competitors are entering the European market. In addition, Germany in particular as a manufacturing location is falling further behind in terms of competitiveness.”
As an outcome, Volkswagen Group’s president stated the business “must now act decisively.”
Shares of Volkswagen traded 2.4% greater on Monday mid-day.
Volkswagen stated that brand names within the business would certainly require to go through a “comprehensive restructuring,” prior to including that the present circumstance indicates that also plant closures at automobile manufacturing and element websites can no more be eliminated.
The carmaker stated it really felt forced to bring an end to its work security arrangement– a work safety program that has actually remained in area because 1994– in order to protect “urgently needed structural adjustments for greater competitiveness in the short term.”
“The situation is extremely tense and cannot be resolved through simple cost-cutting measures,” VW brand name chief executive officer Thomas Sch äfer stated in the declaration.
“This is why we want to initiate discussions with employee representatives as soon as possible to explore the possibilities for sustainably restructuring the brand,” he included.
Volkswagen stated all needed procedures would certainly be talked about with the General Works Council and German profession union IG Metall.
