Job cuts will be necessary at Volkswagen headquarters in the northern German city of Wolfsburg in the coming years, says chief executive Herbert Diess, eyeing the problems of computer chip shortages and new competitors.
"The results of the third quarter show once again that we must now systematically drive forward the improvement in productivity in the volume sector," he said on Thursday. The figures showed a sharp decrease in sales volumes between July and September and a light fall in overall sales.
"We need more speed in the development of new vehicles and in decision-making," Diess said on Thursday, with a view to the competition, specifically a factory belonging to US electric car manufacturer Tesla revving up on the outskirts of Berlin.
"That is the challenge Wolfsburg is facing," he said. The plant must become more productive, Diess added.
Part of the problem is that the company employs 675,000 people, the vast majority of whom work on construction of combustion engine vehicles. But the cuts will not only be on the factory floor, but also in management and development.
"We will certainly need to cut jobs to achieve this," the VW boss stated, referring to jobs in production as well as in management and development.
In recent weeks, there has been speculation about a reduction of around 30,000 jobs in the core brand VW Passenger Cars. Diess did not want to comment on concrete figures. "That has not been decided yet," he said.
The main plant in Wolfsburg is currently operating at low capacity, mainly due to bottlenecks in the chip supply.
According to sources, the Volkswagen Group plans to postpone an annual November meeting for decisions about medium-term investment planning, probably by about a month.
The so-called planning round, which lays out billions in capital expenditure for the next five years and thus also decides on the model allocation of plants, needs more time, according to sources close to the company on Thursday.
Despite the problems, the company still managed to record profits in the third quarter, even if they were lower than in past reports. Although sales were down 4 per cent to 56.9 billion euros (66.9 billion dollars), profits attributable to shareholders rose about 7 per cent, to 2.8 billion euros.
Part of that was due to strength in the company's financial division, with profits from financing and leasing, a division that saw a record result of 1.5 billion euros. Some of that is attributable to higher prices for used cars, which are in demand because customers are having a hard time finding new cars.
Soure: DPA
