Klingbeil calls Volkswagen restructuring deal only the start
German Vice Chancellor Lars Klingbeil says he is grateful for the agreement but does not see it as the end of Volkswagen's overhaul
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German Vice Chancellor Lars Klingbeil said he is grateful for Volkswagen's restructuring agreement, but made clear he views it as only the start of the carmaker's overhaul.
The deal, agreed by Volkswagen's supervisory board on September 4, adds a further 50,000 job cuts to the 50,000 already agreed, taking the total to 100,000, according to Daily Sabah. It carries a cost of €16 billion ($18.6 billion), which the Rio Times Online reports will fund severance programs, early-retirement schemes and the reorganization of sites losing car production. A plan to split Volkswagen's passenger-car brand from its components business was dropped.
Four German plants remain without a settled future: Emden, Hanover, Zwickau and Audi's Neckarsulm, all of which have no competitive follow-on production once current models run out between 2031 and 2034, the Rio Times Online reported. Volkswagen's model lineup is set to shrink by as much as half by 2035, with about a third of activities considered non-strategic to be divested or realigned. Labor leaders have told chief executive Oliver Blume that the agreement does not give management a free hand, Bloomberg reported, pointing to further disputes over jobs and factories. A representative of shareholder Union Investment called the deal a positive sign for the company and the capital market despite the scale of the cuts, Reuters reported via Investing.com.
Klingbeil's description of the deal as only a start reflects the size of what Volkswagen still has to resolve: 100,000 job cuts, a €16 billion restructuring bill and pressure on its credit rating. It reads as an acknowledgment that deeper structural change is still to come, rather than a signal that the worst has passed, and it keeps markets in a wait-and-see position on the stock.