BERLIN (AP) — Volkswagen’s chief executive signaled over the weekend that shutting down manufacturing facilities is not his preferred path forward as the automaker works to improve its financial performance.
The company, headquartered in Wolfsburg, Germany, is grappling with the need to reduce spending domestically while also facing growing competition in the highly profitable Chinese market.
Last week, Volkswagen announced that its ongoing “fundamental realignment” — now in its fourth year — had entered a new stage. As part of that effort, the automaker revealed plans to cut its vehicle model offerings by as much as half, though no specific details were provided. Questions continue to swirl about additional cost-reduction measures, including the fate of several German production facilities.
“There are more intelligent solutions than closing plants,” CEO Oliver Blume told the German newspaper Bild am Sonntag.
Blume noted that cost-cutting measures already in place in Germany are delivering results. “We were able to improve our factory costs in Germany by an average 20% last year alone,” he said, calling it “strong progress.”
The CEO acknowledged that while Volkswagen’s vehicles enjoy strong consumer demand, the company’s bottom line remains a challenge. “We just earn too little money with them. So we must continue to reduce our costs. In all kinds of costs,” Blume said.
