The German automotive group Volkswagen estimates the total cost of job cuts and potential factory closures – part of a major restructuring agreement concluded last week – at approximately 16 billion euros, said a person familiar with the situation on Thursday.
The German car manufacturer, the largest in Europe, has embarked on its most extensive restructuring in history, citing a struggle for survival against competition from China, severe customs duties, and overcapacity in production.
The plan includes exploring alternatives for four German plants that will be left without models to produce in the next decade, as well as reducing a number of positions by about 50,000 more than initially anticipated, according to a source cited by Reuters.
The source stated that the gradual cessation of production at the Emden and Zwickau plants would cost approximately one billion euros for each unit, while the costs for the Neckarsulm and Hanover plants would amount to two billion euros each.
Approximately 10 billion euros are expected to be allocated to cover the costs related to eliminating up to 60,000 jobs worldwide.
A Volkswagen spokesperson declined to comment on the cost information, initially published by the German magazine Der Spiegel.
The Volkswagen board of directors approved the company's recovery plan unanimously a week ago, which could include reducing 50,000 - 60,000 jobs.
The company did not provide further details on the timeline for staff reduction or how these measures will be distributed among its brands and regions.
The German car manufacturer cited increasing global competitive pressure, changes in demand patterns, and technological developments in the automotive industry as reasons for the planned measures.
T.D.