VW boss: cost-cutting programs to generate ten billion in 2024
Europe's largest car manufacturer Volkswagen wants to benefit significantly from the cost-saving efforts in its brands as early as 2024. "As early as next year, we plan to realize an effect of more than 10 billion euros for the Group through the performance programs of our brands," Group CEO Oliver Blume told the "Frankfurter Allgemeine Zeitung" (Friday).
The efficiency gains would not have a one-to-one impact on earnings, but would at least help to offset expected burdens next year. "2024 will be a very challenging year economically," said the manager. However, he wants to see the first successes of the initiatives that have been launched. "The aim is to manage the Group in a stable manner in order to be able to take off from 2025." VW preference shares listed on the DAX fell by around one percent in the morning in a weak industry environment.
Blume set new return targets for all of the Group's brands in the summer, which are to be achieved through savings and additional revenue opportunities. The core VW Passenger Cars brand in particular is the problem child of the Lower Saxony-based company. By 2026, it is to free up a total of ten billion euros in earnings and raise the return on sales to 6.5 percent. In the first nine months of 2023, it was still at 3.4 percent. Brand CEO Thomas Schäfer is currently negotiating with the works council on how this can be achieved. Blume made it clear that this would not be possible without a reduction in staff. "In order to increase our efficiency, we also need to reduce our workforce," he said.
Blume did not want to specify exactly how many jobs would be cut. "We are using socially responsible instruments such as the demographic curve or partial retirement arrangements." The talks were going well and constructively. The employees' side could imagine a works meeting on December 6 in Wolfsburg to present the details, and clarity should then prevail at the latest shortly before Christmas at a VW management conference, the newspaper reported.
The Group CEO of Volkswagen, Oliver Blume, intends to reduce costs and generate over 10 billion euros through performance programs by 2024, aiming to improve the car manufacturer's economic stability for future growth. To achieve these savings, Blume mentioned the necessity of reducing the workforce, hinting at the use of socially beneficial measures such as phased retirement and natural workforce turnover.
Source: www.dpa.com
