Volkswagen chief takes cost warning straight to Emden workers as four German plants await verdict

Volkswagen chief executive Oliver Blume travelled to the company's embattled Emden factory in north-western Germany on Wednesday, where he delivered a stark message to employees: labour costs at the site currently run at more than double the level seen at comparable European locations, and closing that gap is essential if the operation is to have a long-term future.

"We measure ourselves against the best sites in Europe - with the goal of securing the lasting competitiveness of our group," Blume told the assembled workforce. He noted that production expenses at other plants in the group's network were significantly lower. "That is not a criticism, it is the reality against which we must measure ourselves," he added.

His appearance had been keenly awaited in the region. Emden has appeared repeatedly on internal listings of facilities viewed as being at risk, and unease among staff has been mounting for months. A red flag flew in front of the Volkswagen emblem in the city as the executive began his visit, having touched down at the local airfield at 9 am (0700 GMT) in a twin-engine business jet operated by the carmaker's own aviation unit.

Addressing the plant directly, Blume repeated an assessment he has made previously: that current planning shows no "competitive utilization" during the 2030s for four German sites - Emden, Zwickau and Hanover, along with Audi's factory in Neckarsulm. Crucially, however, he emphasized that no decision to close any of them has been reached.

"Our goal is to create viable prospects for all sites within the next six to 12 months," Blume said. "Should it turn out in the end, despite all efforts, that a follow-on allocation is not possible, our responsibility does not end there."

Beyond the question of which factories survive, Blume confirmed a sweeping shake-up of the company's hierarchy: one in four management positions across the group is to be cut under the cost-reduction programme. "All areas must play their part; it is a major effort that can only succeed together," he said in Emden.

According to the chief executive, the next phase of the savings drive will focus particularly on expenditure outside direct vehicle production. That means positions at group level, central administrative functions, development operations and the sales organisation will all come under scrutiny.

Blume had signalled earlier in the year that he was drawing up a new "target vision 2030" for the group and intended to tighten the austerity course markedly. Since that announcement, tens of thousands of additional jobs and four entire plants have been placed under threat.

The frequently cited figure of 50,000 potential job losses is not a target, the executive stressed, but rather a "theoretical calculation" derived purely from cost requirements. He estimated that roughly half of the identified need falls in Germany, with the remaining half distributed worldwide across approximately 170 group companies.

From Emden, Blume was scheduled to travel on to Zwickau in east-central Germany, where workers harbour similar fears about their plant's outlook. The back-to-back visits underscore the balancing act confronting Europe's largest automaker as it pushes through deep structural savings while trying to preserve industrial peace at home.

For the thousands employed at the two sites, the message from headquarters was unmistakable: the coming twelve months will go a long way toward determining whether their factories win new vehicle allocations - or drift further toward the exit list.

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