Technicians work at the production line for electric car models of the Volkswagen Group in Zwickau, Germany, April 26, 2022. REUTERS
BERLIN, Sept 10 (Reuters) – Volkswagen <VOWG_p.DE> estimates the total cost of job cuts and potential plant closures, part of a landmark restructuring pact struck last week, at around €16 billion ($18.6 billion), a person familiar with the matter said on Thursday.
The German carmaker, Europe’s largest, has embarked on its biggest ever restructuring, citing an existential battle against competition from China, biting tariffs and overcapacity.The plan includes exploring alternatives for four German plants that will eventually run out of models during the next decade and a reduction of around 50,000 more positions.
A Volkswagen spokesperson declined to comment on the costs, which were first reported by German magazine Der Spiegel.
The carmaker plans to set aside up to €10 billion by 2030 for the elimination of roughly 60,000 jobs, the report said, adding those funds would cover measures such as retirement schemes and severance packages.
Volkswagen also plans to earmark about €6 billion for the possible cessation of vehicle production at those four plants, Spiegel reported. The plants’ future is under review but no final decision has been made.
Reporting by Christina Amann Writing by Miranda Murray and Christoph Steitz Editing by Ludwig Burger and Sabine Wollrab
