Volkswagen CEO vows more restructuring, sees lessons in China: Report

By Verena Sepp

 

Volkswagen AG’s chief executive officer said the restructuring process underway at Europe’s largest automaker will continue even as its order backlog rises, according to Bild am Sonntag.

 

To avoid costly overcapacity, VW is applying “clear manufacturing cost targets” to all its plants, be they in Germany, Europe or China, Oliver Blume told the German newspaper in an interview.

 

“We will continue to scrutinize capacities in the future,” Blume said. “The restructuring will continue,” he said, while defending the company’s plan to cut about 50,000 jobs in Germany by 2030.

 

VW has a higher cost structure in its home market, including labor costs, “and we have to offset that with higher productivity,” Blume was cited as saying. “Our energy costs are too high and there’s too much regulation,” he said.

 

 

“Developing and building vehicles in Germany and then exporting them doesn’t work any more because the various regions of the world have changed,” he said.

 

VW has forecast an operating return this year as low as 4% as tariffs, spending on electric vehicles and intensifying competition from China drag on its business.

 

Germany can learn a lot from China, Blume said. “The Chinese take a very systematic approach with so-called five-year plans and have clear priorities with that too,” he said. “It’s optimally structured. And what we find very positive in China is a high level of discipline and willingness to implement these initiatives.”