Volkswagen CEO says 50,000 more jobs could be at risk

Volkswagen chief executive Oliver Blume has told employees that a further 50,000 jobs could be at risk, according to an internal memo seen by AFP, confirming reports that the group is targeting 100,000 cuts worldwide.

Blume told workers that Volkswagen must “act now” to protect its future. He said the company needs to become more efficient, more robust and simpler, and must reduce costs. According to the memo, Volkswagen's costs are about 20 percent higher than those of competitors, and overheads need to be brought to a competitive level.

Blume said that because half of Volkswagen's overheads come from staff costs, a theoretical calculation, assuming no change in labor costs, would mean the loss of around 50,000 jobs. The possible cuts would be in addition to 50,000 jobs that Volkswagen is already cutting in Germany, including about 35,000 at its core Volkswagen brand under a 2024 agreement with unions.

Volkswagen owns 10 brands, including SEAT, Audi and Porsche. AFP reported that if the group cut 100,000 positions, it would be the biggest restructuring in the history of the global auto industry, exceeding the 50,000 job cuts General Motors made after declaring bankruptcy in 2009.

Blume also said the future of four German factories was uncertain. He wrote that Volkswagen could not currently confirm that the Emden, Hanover, Zwickau and Neckarsulm plants would be able to operate competitively into the 2030s.

The company is under pressure from US tariffs, lower profit margins on electric cars and strong competition in China, where local carmakers are also exporting more to Europe. Management began talks with the supervisory board last week over possible job cuts, while workers protested at plants across Germany.

Any restructuring is likely to face opposition. Labor representatives and the German state of Lower Saxony together hold more than half the seats on Volkswagen's supervisory board. The state, where Volkswagen has its Wolfsburg headquarters and several plants, and labor representatives both generally oppose plant closures.

Unions have criticized Volkswagen and Blume for leaving employees unsettled while reports of large job cuts circulated. Blume said in the memo that media leaks had been unplanned and had annoyed him, adding that disclosure of confidential information unsettled workers and damaged the business.

Some industry analysts have suggested Volkswagen may have deliberately allowed the 100,000 figure to become public as a negotiating tactic, and that the final number of cuts is likely to be lower.

An IG Metall spokesman called Blume's memo superficial and said employees were still left without enough information. He said management's communication remained poor and that shop stewards were organizing meetings where Blume would be expected to answer staff questions in person. The spokesman said the answers would show whether the executive board intended to deal with the crisis with staff or against them, warning that if it chose the latter, a fight was likely.