Volkswagen says cost cuts are urgently needed as its earnings decline sharply

Volkswagen says important costs cuts are urgently needed arsenic it reports a steep diminution successful third-quarter net and faces worker representatives angry astatine nan anticipation of nan automaker’s first works closures successful Germany

BERLIN -- Volkswagen said important costs cuts are urgently needed arsenic it reported a steep diminution successful third-quarter net connected Wednesday and faced worker representatives angry astatine nan anticipation of nan automaker's first plant closures successful Germany.

The institution reported nett profit of 1.58 cardinal euros ($1.7 billion) for nan July-September period, a 64% diminution from nan 4.35 cardinal euros it earned a twelvemonth earlier. Revenue was only marginally lower, slipping 0.5% to 78.49 cardinal euros.

The figures came 2 days aft nan caput of Volkswagen's useful assembly said guidance had informed worker representatives that it wants to adjacent astatine slightest 3 plants successful Germany. The institution hasn't publically elaborate its plans.

Volkswagen said successful early September that car manufacture headwinds mean it can’t norm retired works closures in its location country, and must driblet a occupation protection promise successful unit since 1994 that would person barred layoffs done 2029.

It cited factors including caller competitors entering European markets and Germany’s deteriorating position arsenic a manufacturing location. European automakers are facing accrued title from inexpensive Chinese electrical cars.

The latest results “demonstrate nan urgent request for action successful a volatile situation characterized by aggravated competition,” main financial serviceman Arno Antlitz said. “This is why we are facing important and achy decisions that we request to make together and to carnivore together.”

“We've not forgotten really to build awesome cars, but nan costs — specifically successful our German operations and factories — are acold from being competitive,” Antlitz said. “This is why things cannot proceed arsenic they are now.”

Citing nan confidentiality of talks pinch worker representatives, he said he wouldn't remark specifically connected plans aliases “speculations.”

Also connected Wednesday, Volkswagen was holding a 2nd information of talks astatine its Wolfsburg office pinch national and worker representatives.

The caput of nan worker council, Daniela Cavallo, said workers want to spot a “comprehensive scheme for nan future," which needs to impact much than labour and works costs.

“We expect coming that nan institution astatine slightest state its readiness to participate a negotiating process pinch america that has nan purpose of processing alternatives to works closures and layoffs,” said Thorsten Gröger, nan location leader of nan IG Metall business union. That, he added, is “the precondition for america to beryllium capable to proceed this negotiating process.”

Otherwise, he noted that a no-strike responsibility nether nan past costs woody pinch Volkswagen expires Dec. 1.

Volkswagen has immoderate 120,000 labor successful Germany, wherever it has 10 plants — six of them successful nan bluish authorities of Lower Saxony, including Wolfsburg.