Volkswagen management has little to show from talks with the group’s stakeholders, laying bare the difficulties in overhauling Germany’s creaking auto giant at a time of existential challenges for the industry.
A meeting of the supervisory board ended last night without any mention from the company on the job cuts or plant closures that sources close to the matter said CEO Oliver Blume would put to the committee.
Instead, Volkswagen repeated largely known targets to reduce production capacity and gradually streamline its sprawling model line-up and investment portfolio – measures that do not require the blessing of the supervisory board.
Jefferies analysts said there was “no indication of progress towards an agreement having been reached” on plant closures or job cuts of up to 100,000.
Bernstein analysts said the plan communicated by Volkswagen after the meeting was “long on ideals, but very short on specifics”.
Volkswagen’s supervisory board includes representatives of the owner families, unions and the Lower Saxony state government.
Volkswagen is under pressure to restructure the business model that underpinned its success for decades. The company is now contending with high costs and excess capacity at home, along with rising Chinese competition, regulation and US import tariffs, which have combined to slice its margins between 2021 and 2025.
“Everyone involved is fully aware that Volkswagen and the automotive industry as a whole are currently facing a critical situation, with an extremely challenging international competitive environment,” Lower Saxony premier Olaf Lies said in a statement after the meeting.
He added that the state was working with management to overcome the challenges.
