VW Chief Blume: 'Situation is more than critical' amid cost-cutting drive

Volkswagen CEO Oliver Blume has painted a grim picture of the company's financial health, stating the situation is "more than critical." He emphasized the urgent need for action, despite the company's operational capacity.

Blume pointed to the current 3.8 percent operating return as solid but insufficient for long-term investment in new technologies, products, and maintaining its global locations. Previous cost-saving measures, such as a 20 percent reduction in factory costs at German plants last year, are deemed inadequate.

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The situation is more than critical.

Volkswagen is preparing for a series of nine employee meetings across Germany from August 25 to August 31. These meetings, starting in Wolfsburg and including locations like Hannover, Braunschweig, Salzgitter, Dresden, Chemnitz, and Kassel-Baunatal, will address the workforce. The company is reportedly considering significant job cuts, with up to 50,000 positions potentially at risk across four plants as part of a new "Target Picture 2030" strategy.

Blume had previously announced plans to develop this new strategy and intensify cost-cutting efforts earlier this year. The upcoming meetings are expected to provide clarity on the future direction and potential workforce adjustments at Europe's largest automaker.

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But they are far from sufficient to generate permanently adequate funds for new technologies, new products, and our locations.