Volkswagen to cut tens of thousands of jobs

Volkswagen plans to cut tens of thousands of jobs and close factories in Germany for the first time in the carmaker’s 87-year history.

CEO Blume and other executives argue that cuts are vital if the company is to survive structural challenges such as Europe’s shrinking car market and the slowing appetite for German brands among Chinese consumers.

Jefferies analyst Philippe Houchois said the outcome of the restructuring would decide the fates of both Blume and Cavallo.

“If the management cannot get the plant closures, whether Blume can stay or not will definitely become an issue. In the same way for the unions, their head has basically said there would be no plant closure so, if there is one, it puts her in a very difficult position as well,” Houchois said.

Schmidt from DWS pointed out that, in the mean time, Blume’s dual role made the two companies the “only listed companies in Germany that treat themselves to a part-time CEO”.