Executives at German carmaker Volkswagen defended major cost-cutting plans on Monday but did not directly comment on reports that the company would axe tens of thousands of jobs.
The top executive at the Volkswagen car brand, Thomas Schäfer, said in a statement that costs at plants in Germany have become particularly high.
“We cannot continue as before,” Schäfer said. “We are not productive enough at our German sites and our factory costs are currently 25% to 50% higher than we had planned. This means that individual German plants are twice as expensive as the competition.”
The statement was released shortly after the head of the VW Works Council, Daniela Cavallo, said the automaking giant is planning to shut down at least three factories in Germany and downsize all other plants.
Cavallo also said that VW is demanding across-the-board pay cuts for its German workforce in ongoing collective bargaining talks.
“Without comprehensive measures to regain competitiveness, we will not be able to afford significant investments in the future,” Volkswagen’s chief human resources officer, Gunnar Kilian, said in the statement.
Kilian did not directly address those claims, and did not provide any details about any specific cost-cutting measures the carmaker is considering.
“The fact is the situation is serious and the responsibility of the negotiating partners is enormous,” Kilian said.
“We are sticking to the principle agreed with co-determination that the discussion about the future of Volkswagen AG should first be conducted internally with our negotiating partners,” he added.
Volkswagen announced “concrete proposals to reduce labour costs” ahead of scheduled collective bargaining talks with trade union leaders on Wednesday.
Schäfer said that Volkswagen’s aim remains to increase the return on sales to 6.5% by 2026, which he contended is the only way to finance necessary future investments.
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