Volkswagen CEO Vows to Sidestep Plant Closures While Accelerating Cost Cuts

Volkswagen AG’s chief executive Oliver Blume told Germany’s *Bild am Sonntag* on Sunday that the automaker is actively seeking alternatives to shutting factories as it pursues a broader turnaround. The remarks came after Volkswagen announced the next phase of its three-year “fundamental realignment,” which includes a plan to trim the model lineup by up to half. The company faces mounting pressure to lower expenses in its home market and to contend with intensifying competition in China’s lucrative automotive sector.

Volkswagen CEO looks to avoid plant closures as automaker moves to cut costs

The realignment, first outlined in 2021, has progressed to a stage where Volkswagen is reshaping its product portfolio and tightening operational efficiency. While the firm has not disclosed detailed measures beyond the model-line reduction, the strategy reflects a response to thin profit margins on popular vehicles and the need to sustain profitability across all cost categories.

Associated Press

Blume highlighted that a German-wide cost-reduction program already yielded measurable results: factory expenses fell by an average 20 % in the previous year, which he described as “strong progress.” The planned model-line shrinkage could affect up to 50 % of current offerings, though specific models slated for removal were not identified.

Associated Press

In his interview, Blume emphasized that closing plants is not the preferred route, asserting that “there are more intelligent solutions than closing plants.” He noted that the recent cost improvements demonstrate the effectiveness of existing measures and underscored the necessity of further reductions because “we just earn too little money with them.” The CEO framed the ongoing effort as essential to preserving jobs while restoring the company’s financial health.

Associated Press

• “There are more intelligent solutions than closing plants,” — Oliver Blume, CEO, Volkswagen

Associated Press

• “We were able to improve our factory costs in Germany by an average 20% last year alone,” — Oliver Blume, CEO, Volkswagen

Associated Press

• “we just earn too little money with them. So we must continue to reduce our costs. In all kinds of costs.” — Oliver Blume, CEO, Volkswagen

Associated Press

• “strong progress.” — Oliver Blume, CEO, Volkswagen

Associated Press