Is Volkswagen about to shut its plants?
What's the story
Volkswagen's Chief Executive Officer (CEO) Oliver Blume is working to avoid plant closures. He revealed this in an interview with Bild am Sonntag newspaper. The move comes as part of the company's plan to turn around its performance amid rising competition and cost-cutting pressures, especially in the Chinese market.
Strategic shift
Volkswagen's model range to be cut by half
Last week, Volkswagen announced that its "fundamental realignment" over the last three years has reached a new phase. The company plans to cut its model range by as much as half. However, it did not provide specific details on how it intends to achieve these cost-cutting measures. This has led to renewed speculation about the fate of several plants in Germany.
Cost reduction
Cost-cutting program in Germany showing results
Blume said, "There are more intelligent solutions than closing plants," stressing his commitment to avoiding such drastic measures. He also revealed that a cost-cutting program in Germany is already showing results. "We were able to improve our factory costs in Germany by an average 20% last year alone," he said, calling it "strong progress."
Profitability issues
Volkswagen not making enough money from products
Despite the popularity of Volkswagen's products, Blume admitted that the company is not making enough money from them. He said, "We just earn too little money with them. So we must continue to reduce our costs." The statement highlights the ongoing profitability challenges faced by one of the world's leading automakers.