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Volkswagen CEO says the cost of operating in Germany is a major obstacle to competitiveness

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The cost-cutting program planned by Volkswagen It’s inevitable to remedy “decades of structural problems” at the German automaker, said the company’s chief executive, Oliver Blume, in an interview published this Sunday (3).

“Weak market demand in Europe and significantly lower profits in China reveal decades of structural problems at VW,” Blume told the newspaper Picture on Sunday Sunday.

The head of Volkswagen’s works council said on Monday that the carmaker plans to close at least three plants in Germany, lay off tens of thousands of employees and reduce the size of its remaining factories in Europe’s biggest economy as part of of a deeper review than expected.

READ MORE: Volkswagen crisis in Germany is a warning for the US about climate policies

The carmaker has not confirmed these plans, but asked its employees on Wednesday (31) to accept a 10% pay cut, arguing that this is the only way Europe’s biggest carmaker can save jobs and remain competitive.

Blume told Picture on Sunday that the cost of operating in Germany is a major obstacle to Volkswagen’s competitiveness, therefore “our costs in Germany must be massively reduced”.

There is no flexibility on cost reduction targets, only on how to achieve them, he said.

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