- At a company gathering, VW's upper management advocated for maintaining the current strategy to ensure success.
Top execs at VW justify stricter budget cuts during a staff gathering in Wolfsburg. "We've got approximately one to two years to make a comeback," stated CFO Arno Antlitz to over 10,000 VW workers. "We need to make the most of this time," he added. "For quite some time now, we've been spending more money on our brand than we're bringing in, and that's unsustainable!"
VW intends to set aside funds for new initiatives via these savings. "We urgently need funds for heavy investment," said brand head Thomas Schäfer. "If we can manage to sustainably reduce our expenses and invest in an unprecedented product lineup that the rivals and customers haven't witnessed yet, then we'll have laid the foundation for future generations to keep working for Volkswagen in Germany."
Staff voiced their concerns
The admin was met with tough pushback from the employees. VW failed to offer fresh insights about the enhanced savings strategies unveiled on Monday at the event organized by the works council. Europe's leading automaker had announced its decision to strengthen its austerity measures for the primary VW brand, given the worsening circumstances.
A German plant closure and layoffs are no longer off the table. The works council and IG Metall have expressed strong opposition, and the state of Lower Saxony, which holds a stake in VW, has urged the company to avoid shutting down locations.
Revenue shortage for two facilities
Referring to the locations, Antlitz highlighted excess capacity. Currently, around two million fewer vehicles are sold annually in Europe compared to pre-pandemic levels, and this trend is unlikely to change. For VW, with a European market share of around 25%, this translates to: "We're missing out on selling around 500,000 vehicles, the sales for around two facilities. And this has nothing to do with our products or poor performance by sales. The market simply isn't available anymore."
VW still hasn't disclosed potential locations that could be shut down. The company had earlier clarified that plant closures would be the last resort, only if swift measures could not be implemented instead. VW operates car plants in Wolfsburg, Emden, Osnabrück, Hannover, Zwickau, and Dresden, as well as component factories in Kassel, Salzgitter, Braunschweig, and Chemnitz.
VW is looking to allocate some of the savings from the budget cuts to new initiatives. Despite the budget cuts, brand head Thomas Schäfer emphasized the need for significant funds for heavy investment.
VW's CFO Arno Antlitz mentioned that due to reduced vehicle sales in Europe, the company is missing out on selling around 500,000 vehicles, the sales for around two facilities, and this is not due to poor performance but rather a shrinking market.
These sentences contain the word ['VW'] and continue the narrative from the given text.
