Volkswagen boss Blume: Costs in Germany have to come down massively

Our labour cost level here, for example, is often more than twice as high as the average of our European locations

 

Admin I Sunday, November 03, 2024

LOWER SAXONY- Volkawagen Group Chief Executive Officer,  Oliver Blume sees no alternative to tough cost-cutting measures at Volkswagen, according to an newspaper interview published on Sunday.

“The goal for cost and capacity adjustments has been set,” he told the Bild am Sonntag newspaper. “Costs in Germany have to come down massively,” Blume said.

“Our labour cost level here, for example, is often more than twice as high as the average of our European locations.”

Volkswagen’s works council has said at least three plants in Germany could be closed, though VW has not provided any information on this so far. In the current collective bargaining negotiations, the carmaker wants to reduce collectively agreed wages by 10%.

Blume emphasized that there is also a need for action in the areas of development and distribution costs, as well as in other cost areas.

However, he said that Volkswagen is actually in a good position compared to its competitors. Group sales are currently slightly higher than in the previous year, and “our new products have been very well received”.

However, the operating result is under enormous pressure after nine months and has fallen by more than 20%.