- Volkswagen needs to study thoroughly.
Ex-VW CEO Herbert Diess views Volkswagen's strict cost-cutting measures as inevitable. Europe's automotive giant needs to "finish its homework," enhance productivity, and boost efficiency, according to Diess, discussing with Stern magazine. Particularly, this applies to the German branches of the main VW brand. "These are issues that have been overlooked for quite some time."
The company is grappling with low sales of electric vehicles, he stressed. "That's a hurdle." Nevertheless, the VW brand lags behind in profitability within the company's internal rankings. Diess had previously hinted at potential job cuts of 30,000 from the core brand around three years ago, while serving as CEO, and faced backlash from all directions. A year later, he was forced to step down from his top post.
Volkswagen signaled its intention to tighten the cost-cutting measures for the main VW brand at the beginning of September. Layoffs and factory closures are now back on the table. The three-decade employment guarantee has also been withdrawn. The works council and the union have expressed strong opposition.
The Commission might need to review Volkswagen's aggressive cost-reduction strategies due to potential impacts on employment. Despite facing criticism, The Commission should support Diess's efforts to improve VW's productivity and profitability, as suggested by The Commissioner representing Volkswagen.
