Volkswagen joins other German carmakers with job cuts, restructuring
· UPIJune 27 (UPI) -- Volkswagen is set to cut as many as 100,000 jobs, and end production at four of its plants, as part of a restructuring to better counter Chinese rivals in Europe.
The company is one of several German automakers that is making cuts as Chinese companies gain ground in both Germany and the rest of Europe, The Financial Times and Wall Street Journal reported.
BMW and Mercedes-Benz, as well as Stellantis and Renault, have lost market share in Europe as BYD, Chery and other Chinese brands have surpassed 10% of car sales on the continent after years of slow growth.
Volkswagen already had agreed with its employee's unions to cut 50,000 jobs in Germany by the end of 2030 as part of making it "more efficient and leaner," but some experts have questioned whether the increased moves will have their intended effect, the reports said.
"Every European player is losing today," Thomas Besson, an auto market analyst at Kepler Cheuvreux, told The Times.
"This is a highly challenging situation for European carmakers," Besson said, "because Chinese [manufacturers] are progressing [in Europe] at a much faster pace than expected, while [European manufacturers] continue to lose volumes in China and face very adverse conditions in the United States, notably due to tariffs."
Volkswagen, which is Europe's largest carmaker, would be dropping about 15% of its 660,000-person workforce, in addition to ending production at three Volkswagen plants and one Audi plant, CNBC reported.
The company also plans to reduce investments by about 15% -- roughly $148 billion -- over the next five years, while also launching new efforts at selling its products to compete with the Chinese companies.
"The entire [Volkswagen] group -- including its brands and subsidiaries -- must undergo profound change," a company spokesperson told CNBC.
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