La Jornada: VW plans to cut 100,000 jobs and close 4 plants

Berlin. Volkswagen (VW) is considering closing four factories in Germany and extending workforce cuts to up to 100,000 jobs, two people familiar with the matter said yesterday, in what could be the biggest restructuring in the history of the sector.

Members of VW’s supervisory board have been informed of the plans, which will be discussed at a meeting scheduled for July 9, the sources said.

The move comes as the automaker faces increasing pressure from Chinese rivals, high tariffs on auto imports in the United States and declining demand in Europe, which the company says makes its business model unsustainable.

The closure of the Ha-nnover, Zwickau, Emden plants and the Audi plant in Neckarsulm would put more than 45 thousand jobs at risk, according to these sources. The closures would be in addition to 50,000 cuts currently planned.

In absolute terms, the layoff of one hundred thousand people and the closure of four assembly plants would constitute the largest restructuring in the history of the industry.

It would be comparable to the major restructurings carried out by GM before and during its 2009 bankruptcy, as well as those in the early 1990s, when it cut up to 74,000 jobs in four years and closed 21 plants.

Volkswagen CEO Oliver Blume presented the plans to top managers earlier this week to drum up support for deep cuts, which are likely to face fierce resistance from unions and the state of Lower Saxony, the second-largest shareholder.

Blume and Chief Financial Officer Arno Antlitz intend to radically restructure the 89-year-old company, including spinning off the core VW brand and splitting operations into separate entities, Manager Magazin said, which first reported the restructuring. “High costs are just a symptom, not the cause. They do not address the root cause, which is weak sales,” Ingo Speich of Deka, a Volkswagen shareholder, told Reuters. “VW must bring attractive products to the market for which there is a high demand; that would put an end to the debate about costs.”