Volkswagen CEO looks to avoid plant closures as automaker moves to cut costs
Blume said Volkswagen trimmed factory costs by 20% last year and is streamlining its model lineup as labor leaders question the restructuring plan.
- On Sunday, Chief Executive Officer Oliver Blume told the Bild newspaper there are "smarter solutions" than closing plants as Volkswagen seeks to avoid factory shutdowns and improve performance.
- Europe's biggest carmaker faces intense pressure to reduce costs while confronting waning demand and competition in the Chinese market, which has sapped returns at the Wolfsburg-based company's luxury Audi and Porsche brands.
- Volkswagen reported a 20% improvement in German factory costs last year, which Blume described as "strong progress," while the company announced a "fundamental realignment" to streamline its model lineup by up to half.
- Last Thursday, 12 of 19 board members rejected the CEO's proposals at a meeting in Wolfsburg, while the works council cited a "massive loss of trust" in Blume following leaked restructuring plans.
- Specifics on how the company will achieve further savings remain unclear, though management aims to focus on the most attractive market segments and must continue reducing expenses in every area to succeed.
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At the interview with the newspaper Bild, the CEO does not enter into the merit of alternatives. Among the hypotheses leaked in the media, the conversion of the plants to the defense
Volkswagen's executive president, Oliver Blume, said there are "smarter solutions" to reduce costs than shutting down factories and praised the progress already made by the assembler in this area, in statements that can help reduce tensions with the company's union.
The managing director of Volkswagen, Oliver Blume, reassures on the closure of the plants of the group in Germany, a spectrum that had immediately caused the reaction of the powerful union of the German metalworkers. (ANSA)
Volkswagen Group CEO Oliver Blume said cost-cutting programs at its German plants averaged 20% last year.
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