Volkswagen CEO Oliver Blume: Situation “more than critical”

Image: VW

Volkswagen Group CEO Oliver Blume describes the company’s economic situation as “more than critical.” In an interview on the company’s intranet, he stated, according to the German Press Agency (dpa), that while the group remains capable of taking action, there is an urgent need for intervention. An operating margin of 3.8 percent is “far from” sufficient to generate the necessary funds in the long term for new technologies, products, and production sites.

The global automotive industry is “in a mega-crisis. And Volkswagen is right in the middle of it.” Geopolitics, trade barriers, regulations, weak markets, and fierce competition are all putting pressure on the industry. It’s time to roll up sleeves: “For the people, our company, and Germany’s competitiveness.”

Blume criticized the company’s current structure as oversized, complicated, and slow. Past cost-cutting measures, such as reducing factory costs at German plants by an average of 20 percent last year, were insufficient. The CEO had already announced stricter cost-saving measures in the spring and plans to introduce a package of actions this year.

Regarding possible job cuts, the figure of up to another 50,000 jobs at risk cited by Blume serves merely as a guideline for determining action needs and does “not represent a fixed target.” For the sites in Emden, Hannover, Zwickau, and Neckarsulm, there is currently no competitive workforce planning for the 2030s. However, a decision on specific plant closures has not yet been made.

The board of directors is scheduled to answer questions from employees at nine company meetings in the coming days. The meetings begin on August 25 in Wolfsburg, followed by Emden and Zwickau the next day. The series concludes in Hannover on August 31.

If no solutions can be found for specific locations, Blume emphasized that closing plants is always the most expensive and last resort. In such cases, it is necessary to create new opportunities through partners, investors, or new industrial solutions.

"The next few weeks are crucial: everyone must pull together," the Volkswagen CEO told Bild. "We have developed the largest transformation plan in Volkswagen Group’s history." The goal for 2030 is "a comprehensive, global program covering products, technologies, competitiveness, structures, and growth. The coming years will determine who stays in the race and who moves to the forefront."

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Thomas Langenbucher is an expert in electromobility with professional experience in the automotive industry and finance sector. Since 2011, he has been covering electric vehicles, sustainable technologies, and mobility solutions for ecomento.de. Learn more.

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