BERLIN—Volkswagen announced the need for significant cost cuts as it revealed a sharp drop in third-quarter earnings on Wednesday. The company reported a net profit of 1.58 billion euros ($1.7 billion) for the July-September period, a 64 percent decrease from the previous year. Revenue slightly decreased by 0.5 percent to 78.49 billion euros.
Employee representatives were upset about the potential closure of Volkswagen’s first plant in Germany, as the company had informed them of plans to close at least three plants. Volkswagen cited various factors for the possible closures, including new competitors in European markets and Germany’s declining manufacturing position.
Chief financial officer Arno Antlitz emphasized the need for urgent action in a competitive environment, stating that difficult decisions must be made collectively. Talks with employee and union representatives were held at Volkswagen’s headquarters to discuss potential alternatives to plant closures and layoffs.
IG Metall regional leader Thorsten Gröger stressed the importance of entering a negotiation process to prevent closures and job losses. The negotiations did not immediately fail, but demands for a 10% salary cut were deemed unacceptable. Employee council head Daniela Cavallo expressed the desire to work together on a future plan for the company that excludes plant closures and layoffs.
Volkswagen, with 10 plants and around 120,000 employees in Germany, faces challenges in its home country’s operations and factories. The company is navigating through a volatile market that requires strategic decision-making to ensure sustainability and competitiveness.
