Volkswagen's Cost-Cutting Fight Gets Bigger

This article first appeared on GuruFocus. Volkswagen (VWAGY) is weighing up to 50,000 additional job cuts as it tries to close a 20% cost gap with rivals, according to a Reuters report citing an internal memo from CEO Oliver Blume.

This article first appeared on GuruFocus. Volkswagen (VWAGY) is weighing up to 50,000 additional job cuts as it tries to close a 20% cost gap with rivals, according to a Reuters report citing an internal memo from CEO Oliver Blume. The group has already agreed to roughly 50,000 reductions across Volkswagen, Porsche and Audi.

Another round could bring total job losses to as many as 100,000, although Blume described the extra figure as a theoretical estimate rather than a final target. Volkswagen is one of the world's largest automakers, with brands including Audi, Porsche, koda, SEAT and Bentley. It sells passenger cars, commercial vehicles and financial services across Europe, China and other major markets.

The company is reviewing staffing needs across brands, regions and businesses as part of a wider restructuring plan. Labor representatives reportedly opposed proposals that also included the possible closure of 4 factories. Blume said Volkswagen still lacks clear long-term business cases for plants in Emden, Hanover, Zwickau and Neckarsulm, but prefers alternatives to closures.