Volkswagen Chairman: We will continue with strict austerity measures economy

The CEO of the German Volkswagen Group, Oliver Blume, expressed his belief that there is no alternative to strict austerity measures in the largest car manufacturer in Europe.

In statements to the German newspaper “Bild am Sonntag” published on Sunday, Blume said, “The goal of controlling costs and capabilities exists,” noting at the same time that “the way to achieve this goal can be shaped flexibly,” and added, “Costs in Germany must be reduced significantly.” .

Blume pointed out that the costs incurred by Volkswagen in its home country are excessively high. “For example, our labor costs here are often more than double the average costs in our European locations,” he said.

It should be noted that the Volkswagen Workers Council recently reported the possibility of closing at least 3 of the company’s factories in Germany. Volkswagen has not issued any statements in this regard yet. However, during the ongoing wage negotiations, the company is seeking to reduce wages by 10%.

Blume also stressed the need to take action in the areas of development costs, sales and other cost areas to strengthen the company’s position vis-à-vis competitors.

However, Blume saw that Volkswagen’s position was good, and said that the group’s revenues were currently slightly above what they were last year, and “our new products are very well received.”

On the other hand, Blume explained that operating profits were under tremendous pressure in the first months of the year, noting that they had decreased by more than 20%.

to retreat

A few days ago, the British Economist published a report stating that Volkswagen plans to close 3 factories in Germany and lay off tens of thousands of employees, as rumors indicate the possibility of laying off 30,000 employees with a 10% reduction in wages for some employees, and it may reach 18% for others.

According to The Economist, the European giant suffered a 64% decline in profits compared to the previous year, mainly due to weak sales in China.

Decreased investment in Germany

A new study conducted by the German Chamber of Commerce and Industry showed that a third of the country’s industrial companies and 40% of other companies plan to reduce their investments in Germany, in a worrying indication of the decline in industrial investments.

According to the study, only 19% of industrial companies describe their current situation as good, while 35% of them describe their situation as bad.