Volkswagen Group’s comprehensive cost-cutting package to combat Chinese manufacturers’ expansion is pending approval from its Supervisory Board as the carmaker intends to completely close four plants and lay off 50,000 additional workers in the face of challenges, threatening an employment collapse in Germany.
The plan far exceeds the previously agreed-upon plan from two years ago, and with the company's stock trading at its lowest level in 16 years, pressure for change has reached an all-time high.
The plan, which analysts describe as the most radical transformation in the history of the world's second-largest automaker, will be discussed at a board meeting in Wolfsburg on Thursday.
Volkswagen's radical proposal is motivated by declining profit margins, protectionist tariff policies in the U.S., and a loss of market share to Asian competitors.
Volkswagen is alleged to have prepared a comprehensive plan to lay off around 100,000 of its 675,000 workers worldwide in the coming years. The leaked draft of the carmaker’s plans was met with resistance from organized labor unions and shareholder blocs with veto power.
