FRANKFURT, Germany (AP) \u2014 Volkswagen\u2019s board of directors on Thursday approved a sweeping cost-cutting plan that would cut 50,000 jobs, slim the company\u2019s model line by half and end auto production at four German plants. <\/p>\n
The plan put forward by CEO Oliver Blume to counter low-cost competition in China and headwinds from U.S. tariffs overcame resistance from employee representatives and the regional government, which holds a stake in the company. <\/p>\n
\u201cThis is a strong signal for the future of Volkswagen Group,\u201d Blume said in a statement. The plan would \u201cmake our iconic brands even more attractive, stronger and competitive.\u201d<\/p>\n
The plan foresees reducing the number of models by around 50%. The company said it had excess production capacity of 500,000 vehicles in Europe and that \u201ca competitive future production allocation … cannot be secured\u201d for plants in Emden, Zwickau, Hanover and Neckarsulm, although alternative uses will be explored. The board statement said there would be an \u201cadjustment of the employee numbers of around 50,000 positions,\u201d including management jobs. <\/p>\n
Slimming the number of models would mean higher volumes per model, lowering fixed costs. <\/p>\n
The plan also calls for \u201cleaner leadership structures and shorter lines of decision.\u201d<\/p>\n
Thursday\u2019s news release was accompanied by a statement from chief employee representative Daniela Cavallo that the plan was \u201ca necessity for our company to move successfully into the next decade without the associated undertakings coming only on the side of the employees.\u201d <\/p>\n
Cavallo had been strongly critical of the plan when it was presented over the summer. Worker representatives have half the seats on the board, while the government of the Lower Saxony region where Volkswagen is headquartered has two seats. <\/p>\n
The governor of Lower Saxony, Olaf Lies, said that the company was facing \u201cenormous\u201d challenges and that the plan represented \u201ca shared path toward the necessary transformation.\u201d<\/p>\n
Volkswagen, which has around 650,000 employees, reported a 30% drop in after-tax earnings for the first half of the year as sales took a hit in China. In addition to the core Volkswagen brand, its other nameplates include Audi, Skoda, Porsche and SEAT. <\/p>\n","protected":false},"excerpt":{"rendered":"FRANKFURT, Germany (AP) \u2014 Volkswagen\u2019s board of directors on Thursday approved a sweeping cost-cutting plan that would cut…\n","protected":false},"author":2,"featured_media":85084,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20947],"tags":[21902,24702,94,63,89,39918,57746,5741,151,122,61535,28941,38184,21053,5356,23795,46],"class_list":["post-85431","post","type-post","status-publish","format-standard","has-post-thumbnail","category-volkswagen","tag-asia-pacific","tag-auto-industry","tag-business","tag-capitalism","tag-china","tag-compensation-and-benefits","tag-daniela-cavallo","tag-economic-policy","tag-europe","tag-general-news","tag-government-policy","tag-manufacturing-sector","tag-olaf-lies","tag-oliver-blume","tag-volkswagen","tag-volkswagen-ag","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/85431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/comments?post=85431"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/85431\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media\/85084"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media?parent=85431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/categories?post=85431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/tags?post=85431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}