Volkswagen is preparing a restructuring plan worth about €16 billion as it seeks to cut costs and improve operating efficiency. Spiegel and Reuters, citing sources, report that the group is considering sweeping changes affecting both its workforce and manufacturing footprint.
Under the plan, as many as 60,000 jobs could be cut worldwide. Around €10 billion is expected to be allocated to employee compensation and other costs related to the workforce reduction.
Another roughly €6 billion may be needed for the possible closure of four plants in Germany. The facilities mentioned are in Emden, Zwickau, Neckarsulm and Hanover. Sources estimate that a phased shutdown of the Emden and Zwickau plants would cost Volkswagen about €1 billion per site, while halting production in Neckarsulm and Hanover would require an additional €2 billion for each plant.
The company is said to be justifying the measures by pointing to competition from China, high tariffs and excess production capacity. In that environment, the restructuring is seen as a way to protect the group’s viability and profitability.
According to Handelsblatt, Volkswagen expects the overhaul to deliver savings of nearly €31 billion by the end of the decade.
Media reports had earlier said that a VW plant could be converted to produce air defence systems.
