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Volkswagen does not rule out plant closures, layoffs as part of cost-cutting program — DPA

The management also believes that the set cost-cutting goals cannot be achieved through the previously planned job cuts at the expense of partial retirement of employees and one-time payments

BERLIN, September 2. /TASS/. German automaker Volkswagen does not rule out plant closures and layoffs caused by production needs as part of the cost-cutting program adopted in 2023, the DPA agency reported citing a statement adopted after a meeting of the concern's management.

The company’s management sees the need to carry out a large-scale restructuring of the Volkswagen AG brands.

"In the current situation, without prompt action, the closure of car and component manufacturing plants cannot be ruled out," the statement says.

In addition, the management believes that the set cost-cutting goals cannot be achieved through the previously planned job cuts at the expense of partial retirement of employees and one-time payments. In this regard, the management decided to terminate the employment guarantees that have been spelled out in employment contracts since 1994.

Volkswagen Group CEO Oliver Blume, justified the course of austerity by the fact that the situation of the European auto industry has recently been complicated, in particular by the fact that new players are penetrating the European market. The austerity program adopted by Volkswagen in 2023 is designed to increase profits by 10 billion euros by 2026.