Volkswagen confronts financial crisis: Urgent cost cuts planned
During the conference organised on 30th October, Chief Financial Officer Arno Antlitz shared some troubling news.
Volkswagen has been struggling with financial issues for some time. However, the company's management has so far avoided making radical statements about the future. That has now changed—Chief Financial Officer Arno Antlitz is directly addressing the urgent need to cut costs.
The results presented at the 30th October conference are not encouraging. According to official data for the third quarter of 2024, Volkswagen's operating profit fell by 42% to £2.48 billion, with revenues of £68.1 billion. The operating margin fell to 3.6%.
The decline is due to not only weaker sales results but also rising wages, operating, and investment costs. Representatives of Volkswagen stated that the results confirm the need for drastic cuts in Germany, where union leaders oppose the potential closure of three plants and a 10% salary reduction.
"This highlights the urgent need for significant cost reductions and efficiency gains," Antlitz stated, adding that the company spent as much as £4.23 billion on investments in electromobility, which reduced profits. He also mentioned that he is confident about reaching an agreement with the employees but cannot rule out strikes.
Unfortunately, cuts seem to be the only path to relative stability under the current conditions. There is no hope for an increase in sales. According to forecasts, in 2024, the Volkswagen Group will sell approximately 9 million cars globally—250,000 fewer than in 2023.
