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Volkswagen considers shutdown of three plants in Germany German automaker Volkswagen (VW) announced its plan to close at least three plants in Germany as part of economic measures. Volkswagen, facing challenges from high manufacturing costs, fierce global competition, and declining demand in key electric vehicle markets, has announced plans to shutter three of its factories in Germany. Daniela Cavallo, the Chief of the Volkswagen Factory Council, disclosed during a meeting held at the company's Wolfsburg headquarters that the board of directors has approved a strategic plan involving a 10% reduction in wages and the dismissal of tens of thousands of employees. This restructuring will result in significant downsizing across all German operations, including the elimination of certain products, production shifts, and assembly lines. The ongoing crisis has significantly impacted the entire European automobile industry, including all Volkswagen factories in Germany. Contrary to claims suggesting that no facilities are impacted, Volkswagen Factory Council Chief Daniela Cavallo has stressed that every plant is at risk. Cavallo also urged the German government to formulate a comprehensive support strategy to facilitate the transition to Battery Electric Vehicle (BEV) mobility, underlining the critical need for an industry support master plan. Thomas Schäfer, Chief Executive of Volkswagen Passenger Cars, echoed this urgency by calling for a cohesive and practical plan to secure the company's future. He stated, "We must address the core issues: our productivity at German sites is insufficient, and our factory costs currently exceed targets by 25% to 50%."

This is a momentous occasion for the German economy when its biggest automaker, Volkswagen, highlights it will need to reduce its cost base by up to 10% or some 30,000 jobs! I’ve been saying for nearly years the impact of Chinas successful strategy to back technology trends and invest heavily in being leaders in those trends will impact western organisations and now with their leadership in EVs the west is going to struggle to survive let alone be leaders in the automotive arena! The start of the restructuring of the Germany economy is a major social concern as lifestyles are hit hard and there is a lurch to far right sentiments and we are only at the very beginning of this transition! The impact of losing up to 30,000 staff and closing factories is high but the knock on effect for VWs supply chain will be just as high! As China begins to dominate the EV world the issues will become evermore present as competition will turn into a nightmare for European manufacturers. The west will gradually retreat from China as they lose market share and focus on defending their own territories and it will take another 15 years before becoming minor players globally. I’m convinced there will be mergers between German automakers within the next 5 to 20 years as the brands consolidate as a defence mechanism but in the meantime the restructuring of the German economy is going to be bad and similar to the U.K. in the 70s. This restructuring is something I don’t wish on anyone as social upheaval is guaranteed and that’s not great for Europe at this point in history! What is really going to happen to the German economy? #economy #germany #ev #electric #cars #automotive #vw https://lnkd.in/eW5zedu2

🚨 Volkswagen Announces Historic Plant Closures and Mass Layoffs Amid Major Restructuring 🚨 Volkswagen recently made a significant announcement that it will close three plants in Germany—a move unprecedented in the company’s 87-year history. This bold restructuring comes as VW faces tough financial results: Net profit for Q3 2024 dropped to €1.57bn from €4.34bn a year earlier, while the company’s operating profit margin slipped from 6.2% to 3.6% during the quarter. What Led to This Decision? Multiple factors contributed to this drastic move: 1️⃣ Declining Market Demand and Increased Competition: The European car market has seen a drop in demand for EVs, with around 2 million fewer vehicles sold annually post-COVID. Volkswagen has also struggled with declining market share in China, facing stiff competition from local and international EV manufacturers. CFO Arno Antlitz highlighted the urgency, noting, “If we carry on like this, we won't succeed in the transformation.” 2️⃣ Complex Corporate Structure: Volkswagen’s ownership setup and dual share class structure add layers of complexity, as multiple stakeholders have competing interests. This structure complicates VW’s ability to cut costs, given long-term labor agreements including job guarantees, pay raises, and other commitments that limit operational flexibility. 3️⃣ High Operating Costs and Lack of Brand Synergies: VW has struggled with elevated costs at its German plants, further weighed down by inefficiencies across its various brands. The IG Metall trade union demanded additional 7% wage raises. Despite its valuable brand portfolio, including names like Porsche and Lamborghini, VW has been unable to fully capitalize on synergies across divisions. Volkswagen’s future will require a focused approach to cost reduction and operational efficiency. CFO Antlitz emphasized that cost efficiency in German sites is critical, stating, “We still have a year, maybe two years, to turn things around. But we have to make use of this time.” The company will need to close plants, lay-off people and introduce pay cuts, and reduce complexity in its processes to remain competitive. Additionally, VW aims to shift resources toward electric vehicles (EVs) and digital transformation. With mounting competition from EV-first companies and shifting consumer expectations, the company needs to establish a leaner, more agile structure capable of adapting to these changes. In the startup world, this highlights the importance of staying adaptable and open to big changes. If large corporations like Volkswagen can implement major restructuring to navigate market challenges, agile startups should be even more prepared to pivot when necessary to thrive. https://lnkd.in/dXmPxQhj #Volkswagen #CorporateFinance #CostCutting #EVTransformation #StrategicPlanning #AutoIndustry #LongTermGrowth #Profitability #CFO

Recently, VW (https://lnkd.in/eDmkGU3R) announced it would consider closing factories in Germany for the first time in its 87-year history mainly due to cost cuts. This raises questions about the broader implications of such actions, both for individuals and society. As someone who has experienced job cuts and restructuring from a few perspectives during my career journey, I understand some of the challenges - it took a toll on me. How can we best address and minimize the human impact of such cost-saving measures, looking beyond immediate financial returns?

Volkswagen is at a pivotal juncture, making headlines with its decision to close three plants in Germany for the first time in its history. This restructuring won't just shake VW; it threatens the entire German automotive landscape, potentially resulting in tens of thousands of job losses. With rising competition from aggressive Chinese EV manufacturers and sluggish domestic sales, VW's drastic measures signal a larger crisis in the industry. As Germany faces rising production costs and declining demand, the implications stretch far beyond the factory floors. Economic inequalities, rising unemployment, and even political instability could follow if swift action isn’t taken. The question we must ponder is: Can a renowned titan like Volkswagen repurpose itself without sacrificing its legacy? The stakes are high, not just for VW, but for the prosperity of the entire German economy. Let’s keep an eye on how this unfolds!

2024- The KaDeWe Group (owner of several of Germany's most iconic high-end department stores) have applied for restructuring under self-administration, a type of bankruptcy filing. 2024 - Mattress manufacturer, the Breckle Group, which has existed since the 1930s is insolvent. 2024 - Volkswagen plans to close three German factories in an effort aimed at cost cutting over $4.3 billion. 2024 - Volkswagen subsidiary Audi is planning to reduce its workforce by 15%. 2024 - Germany's Siemens head of tax service C. Kezer tells finance committee of the Bundestag that investing in Germany is pointless and the co. will invest abroad. More bankruptcies and insolvencies: 2024 - Metal precision parts manufacturer Schumag AG from Aachen, founded in 1830. 2024 - Lauchhammer art foundry, Germany's oldest, after 275 years of history. Co. 2024 - Schrutka-Peukert, manufacturer of refrigerators since 1871 2024 - Traditional confectionery manufacturer Leysieffer, existing since 1909 2024 - Bakery chain Krachenfels Handels GmbH after 340 years of operation. If this is not warfare against a country through bullshit sustainable energy machinations, I don’t know what is! And Germany is not the only victim of this in Europe! With many of these companies dies history, tradition and family run companies that were handed down generation after generation. RIP Europe 🙏🏻 Execution of EU automotive industry by chinese dragon in just 8 yrs. Wow

How to get out of the Automotive Crisis⚒️ Explore how the #automotive downturn impacts the #foundry #industry. With major players like #Mercedes-Benz and #Volkswagen cutting costs, foundries must diversify beyond automotive. Learn strategies for tapping into new markets and optimizing internal processes. Full Article: https://lnkd.in/dPf9qcJ7

Volkswagen Says Considering Factory Closures in Germany to Cut Costs German automotive giant Volkswagen said Monday it could close production sites in Germany, as the auto industry struggles to manage rising costs. "In the current situation, even plant closures at vehicle production and component sites can no longer be ruled out," Volkswagen said in an internal memo sent to employees and seen by AFP. Europe's largest auto manufacturer remained committed to Germany as a "business location" but "headwinds have become significantly stronger", VW brand CEO Thomas Schaefer was quoted in the document as saying. The challenging conditions meant "we must now step up our efforts" to secure the long-term success of the company, Schaefer said in the note sent to employees. "We want to remain the leading volume manufacturer worldwide –- and do so on our own strength," Schaefer said. Volkswagen last year announced plans for a 10-billion-euro ($11-billion) savings programme and has flagged cuts to its workforce over the coming years to improve profitability. But the group said further measures were now required after disappointing results published in August that showed a dip in profits. Rising costs and cooling demand in China also meant the group had to lower its profit margin forecasts for the rest of the year. The core of the Volkswagen group "now faces particularly significant challenges", the memo said. Despite the cost-saving measures already announced, "the current developments in the automotive market and the German economy demand further action", it said. The company's board had determined that "the brands within Volkswagen AG must undergo comprehensive restructuring". "The goal must be to optimise product costs, material costs, and sales performance, as well as factory and labour costs," the memo said, evoking possible plant closures. "Simple cost-cutting measures" were no longer enough, while the group said it was open to further job cuts, according to the memo. https://lnkd.in/d2qEdF_f

Volkswagen warns of German plant closures, citing ‘extremely tense’ situation https://lnkd.in/dWZWg7Sx Quotes from the article: German carmaker Volkswagen on Monday warned it will no longer be able to rule out plant closures in the country, citing the specter of major cost-cutting measures in order to “future-proof” the company. The announcement was sharply criticized by trade unions, with top German industrial union IG Metall labeling the plan as one that “shakes the foundations” of the carmaker. “The European automotive industry is in a very demanding and serious situation,” Volkswagen Group CEO Oliver Blume said in a written statement. “The economic environment became even tougher, and new competitors are entering the European market. In addition, Germany in particular as a manufacturing location is falling further behind in terms of competitiveness.” As a result, Volkswagen Group’s chief executive said the company “must now act decisively.” Volkswagen said that brands within the company would need to undergo a “comprehensive restructuring,” before adding that the current situation means that even plant closures at vehicle production and component sites can no longer be ruled out. Volkswagen said all necessary measures would be discussed with the General Works Council and IG Metall. Both groups, however, have been quick to condemn the proposals. #volkswagen #automotiveindustry #vehiclemanufacturers #germany #europeanunion #eu #jobs #jobsecurity #plantclosures

🚨 Schaeffler Cuts Jobs Amid Growing Automotive Industry Challenges 🚨 As Schaeffler prepares to cut over 2,000 jobs in Germany, the automotive industry faces mounting pressures. This isn’t just about Schaeffler—it’s a reflection of broader issues impacting giants like Volkswagen and BMW. The rise of electric vehicles (EVs), supply chain disruptions, and slowing demand in key markets are pushing traditional automotive suppliers and OEMs to rethink operations, strategies, and structures. Key Takeaways: Supply Chain Strain: From semiconductors to raw materials, supply chain issues are testing resilience across the sector. Labor Reconfiguration: Companies are shifting their workforce strategies, balancing automation and specialization, impacting job security for thousands. EV Transition Costs: As automakers pivot to electric, legacy suppliers like Schaeffler must adapt their production and technology focus, leading to challenging transformations. This shake-up calls for innovative solutions and collaborative efforts to ensure stability in the face of these disruptions. It also emphasizes the urgency for visibility and adaptability in automotive supply chains. Organizations like Volkswagen and BMW are pressed to accelerate their digital transformation strategies, streamline production processes, and invest in sustainable solutions to stay competitive. ➡️ What do you think is the most pressing challenge facing the automotive supply chain today? #automotive #supplychain #EVtransition #digitaltransformation #schaeffler #Volkswagen #BMW #innovation