Volkswagen might slash around 140,000 jobs
What's the story
Volkswagen AG's labor representatives have warned that the company's planned job cuts could affect as many as 140,000 positions. The warning comes ahead of a presentation by CEO Oliver Blume and brand chief Thomas Schafer at the company's main factory in Wolfsburg. The presentation is part of a series of townhall meetings across Germany over the next few days.
Cutback details
Management proposes cuts
The management has proposed cuts that could eliminate up to 100,000 positions.
However, unionists have warned that another 40,000 workers may have to go if at-risk factories in Germany are forced to shut down.
Blume has previously said this measure is unrealistic for the current decade.
The potential job losses include some 50,000 reductions already agreed in Germany and another 50,000 positions that may be needed globally.
Rising tensions
Rising tensions within VW over proposed cost-cutting measures
The proposed cost-cutting measures have led to rising tensions within the company.
IG Metall chief Christiane Benner has criticized Blume's plan to cut costs and raise margins to 9% as "cloud cuckoo land."
A local union leader has even warned that they are ready to consider strikes if Blume doesn't reconsider his plans.
External pressure
Porsche SE urges management to act faster amid challenges
Porsche SE, the holding company of the billionaire Porsche-Piech family that controls Volkswagen, has urged management to act faster.
The call comes as VW faces declining sales in China, high expenses in Germany, and underused factories.
These challenges have created a roughly 30% cost disadvantage against some rivals and a need to cut at least €10 billion in overhead costs.
Future strategies
VW's strategy includes reducing annual European production capacity
The management is working on plans to cut another 500,000 vehicles from annual European production capacity.
The strategy also includes thinning managerial ranks and reducing the number of models and equipment variants.
As part of this week-long campaign, Blume will directly appeal to workers at the Wolfsburg factory while other senior executives will visit Volkswagen's German plants.