Volkswagen AG Chief Executive Officer Oliver Blume has outlined a far-reaching overhaul to reduce costs at Europe's biggest carmaker. The group, which includes Porsche and Audi, has faced a steep fall in profits and growing competition from China.
As part of this restructuring, Blume confirmed plans to eliminate as many as 50,000 more jobs globally. This comes after the company had previously declined to comment on reports that it was considering up to 100,000 job losses.
While attempting to turn around performance, the CEO indicated that he is trying to avoid closing plants. Although the supervisory board rejected a plan to shut four factories in Germany, Blume stated there are smarter solutions to save money than shuttering factories. He noted that the company was able to improve factory costs in Germany by an average of 20% last year alone.
Blume told staff that the restructuring proposal includes controversial decisions and represents the most comprehensive realignment in the company's history. The plan revolves around 12 initiatives, approximately 150 pages, and 45 individual resolutions for change.