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europe·Europebyschizoidman

Volkswagen needs deep cuts to remain competitive, CEO says ahead of crunch talks

Blume's comments, made in an ​internal company memo seen by Reuters, come as Volkswagen is undergoing what is considered to be ​its largest-ever restructuring, possibly ranging from a fresh 50,000 job cuts to the carve-out of some divisions.

https://www.reuters.com/business/world-at-work/vws-blume-says-overhead-costs-30-above-rivals-50000-jobs-figure-guide-2026-08-21/Open linkView original on lemmy.zip
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14 replies

macniel
feddit.org

Blume could start with firing Blume and other CEOs, for they only take profit but not contribute to it. Fucking leeches.

10
comrade_twistyreply
feddit.org

Too expensive, he be owed the yearly salary of about 50k workers as a one time compensation package for breach of contract if they let him go.

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timbuck2themoon
sh.itjust.works

If you find you need to cut 50000 jobs you better start at the top because it's outrageous you'd ever be that oversubscribed to begin with.

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talreply
lemmy.today

I'd expect that they probably will re-hire some people overseas or similar where labor costs are cheaper.

I remember some analysis a while back from Deutsche Bank or someone like that that said that BYD had N% cheaper costs than Tesla, but that it had significantly cheaper costs than European automakers.

I also remember seeing some articles about German officials talking to Nigeria about some sort of trade stuff. Might be LNG, but also maybe manufacturing.

searches

Well, VW has something happening there.

https://www.assemblymag.com/articles/99082-volkswagen-to-launch-e-tractor-manufacturing-in-nigeria

German automaker Volkswagen has announced plans to establish an e-tractor manufacturing plant in Nigeria. This initiative aims to enhance agricultural mechanization in the country and signifies Volkswagen’s renewed confidence in Nigeria’s economy.

Volkswagen has been expanding its presence across Africa, recently creating a dedicated "Sub-Saharan" region to oversee operations. The company already has manufacturing and assembly facilities in South Africa, Kenya, Rwanda, and Ghana. A similar e-tractor initiative, the GenFarm Project, is already underway in Rwanda, providing sustainable mechanized farming solutions.

Volkswagen’s return to Nigeria marks a significant milestone, reinforcing the country's potential as a key player in Africa’s growing automotive and agricultural sectors.

https://infotrustng.com/volkswagen-reopens-assembling/

Volkswagen Reopens Assembling Plant In Nigeria After 20years

A statement by the Stallion Group, which quoted Ratz Wolfgang, leader, Volkswagen Group’s delegation from Germany, added that the plant has rolled out the first set of vehicles, which includes Passat, Jetta, CC and Amarok models from the rejuvenated plant.

“Today marks the revival of the assembly of Volkswagen vehicles in Nigeria. Volkswagen has returned to Nigeria to continue a long history that began in the 1970s,” Wolfgang said in the statement.

EDIT: Yeah. According to this, VW also has relatively high labor costs compared to other European automakers:

https://www.reuters.com/business/autos-transportation/high-wage-germany-vws-labour-costs-outstrip-competition-2024-11-20/

Part of the reason the company spends more on labour is that it makes many components, and software, in-house, Stifel analyst Daniel Schwarz said. But pressure on margins from China means the company needs to cut fixed costs.

Germany, where Volkswagen employs nearly 45% of its workforce, has the highest labour costs of any passenger car industry worldwide, averaging 62 euros ($66) per hour in 2023, up around a third from a decade ago, according to the German autos association VDA.

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JensSpahnpastareply
feddit.org

Just to put this into perspective: The Volkswagen Golf starts at 28.000€. If we take that 15,4% labour cost into account, all workers including production, procurement, accounting, marketing and so on will have earned 4.312€ producing that car.

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tardigradereply
scribe.disroot.org

This is too simplistic. The majority of costs at VW and other carmakers are spent for their suppliers, not for labour. This means carmakers pay a lot more of their suppliers' workforce than they pay for their own people.

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JensSpahnpastareply
feddit.org

He is talking about "deep cuts" at Volkswagen, not about renegotiations with their suppliers about prices

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tardigradereply
scribe.disroot.org

The majority of costs - including for labour - is spent by suppliers. Your calculation and the possible inference that people earn only a small share of tve entire revenue is too simplistic as it paints a misleading picture.

(I made a longer comment in this thread regarding this issue and how international carmakers compare to each other.)

1
Insekticus
aussie.zone

Volkswagen needs deep cuts to remain competitive, CEO says ahead of crunch talks

"Volkswagen needs deep cuts to remain competitive while the CEO and executive suite of employees can maintain their extremely exorbitant paychecks unhindered" is a bit more accurate.

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avgreply
lemmy.zip

That's not even it, it's that they are the ones wholly responsible for the current situation but they aren't the ones being shown the door.

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B0rax
feddit.org

In these times, news like that could be counted as propaganda to prepare the unions to accept lower offers and cuts like that.

Volkswagen is not nearly doing as bad as they are trying to make it seem.

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tardigrade
scribe.disroot.org

The major cost burden in the car industry isn't attributed to labour but to suppliers.

European brands treat their suppliers much better than their rivals from other continents do, particularly those from China.

Chinese EVs aren't only so cheap because of forced labour, a 996 working culture, weak labour rights, acess to cheap land and loans, and subsidies. There are more reasons, one of them being its practice to squeeze its suppliers.

As one investigation reveals about Chinese supplier payment float,

... Another way Chinese OEMs lower costs is by minimizing financing needs through very long supplier payment terms. In 2023–24, BYD took an average of about 155 days to pay suppliers, Geely 149 days, and Leapmotor a staggering 225 days. This stands in sharp contrast to Western peers, whose payment terms are far shorter—roughly 60 days for Tesla, 43 for Volkswagen, and 41 for Toyota—indicating that they have not followed their Chinese rivals’ practices.

While this practice benefits OEM cash flow, it has severe consequences for suppliers, limiting their ability to reinvest in capex and R&D and potentially undermining quality—posing longer-term risks for China’s auto industry. Beijing has begun to rein in excessive payment delays, but enforcement has been slow. In 2025, Chinese OEMs’ payment terms remained far longer than those of Western counterparts ...

China's leading carmaker BYD even controls suppliers with D-chain, a 'inhouse' payment system,

BYD typically follows a net 30 to 60 payment cycle, with the D-chain system adding an additional six to eight months to that period. In practice, that stretches the total payment period to between eight and 10 months.

That approach greatly reduces BYD’s financial pressure, but is to the considerable disadvantage of its suppliers.

By tying its suppliers to the D-chain platform, BYD can integrate them into its own financial ecosystem, tightening control over its supply chain.

The model also allows BYD to circumvent traditional financial oversight, as it avoids issuing regular commercial paper and standard banking transactions.

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Volkswagen needs deep cuts to remain competitive, CEO says ahead of crunch talks | Spyke