Volkswagen CEO Admits Situation is 'More Than Critical' Amidst Industry Turmoil

Volkswagen CEO Oliver Blume has issued a stark warning, stating the German automotive giant is facing a "more than critical" situation. He acknowledged that Volkswagen, along with the entire German auto industry, is navigating "the greatest turmoil in their history." This crisis is attributed to a challenging global economic climate and escalating competition from Chinese manufacturers.

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Volkswagen and the entire German automotive industry are going through 'the greatest turmoil in their history.'

Blume's candid assessment comes ahead of crucial meetings with employee representatives. The company is reportedly exploring significant cost-saving measures, which could include massive job reductions and the potential closure of several factories. In an internal interview, Blume indicated that no definitive decisions have been made regarding plant closures, but expressed concern about the long-term profitability of facilities in Emden, Hanover, Zwickau, and Neckarsulm.

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we currently see no way for the factories in Emden, Hanover, Zwickau, and Neckarsulm to remain profitable in the 2030s.

The German automaker is grappling with a surplus of 500,000 vehicles produced annually in Europe. Blume emphasized that closing factories would be a "last resort, and the most costly" option. To mitigate unprofitability at certain sites, Volkswagen is investigating alternative "industrial solutions," including discussions with defense industry companies for the potential use of its Osnabrueck plant.

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Factory closures will always be 'the last solution, and the most costly.'

These potential measures follow previous plans for savings presented by Blume to the supervisory board in July, which reportedly faced resistance from the state of Lower Saxony, a major shareholder. The company has already agreed to eliminate 50,000 jobs, with agreements reached with 37,000 employees. Blume stressed the need for universal support for the company's recovery plan, while powerful unions like IG Metall have signaled employee resistance to the management's direction.

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We can only succeed if everyone supports this plan.