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Volkswagen is facing an unprecedented crisis and has up to two years to recover. The German auto giant could close factories for the first time since its founding, putting thousands of jobs at risk.
The German automotive giant, once synonymous with stability and innovation, is now racing against time to avoid an unprecedented crisis.
Volkswagen, icon of the global automotive sector, faces a series of challenges that could culminate in factory closures and the loss of thousands of jobs.
At a meeting held at Volkswagen headquarters in Wolfsburg, Germany, Arno Antlitz, responsible for the automaker's financial and operational areas, made an alarming statement.
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He stated that Volkswagen has “one or two years” to recover from a crisis that threatens the company and its employees.
Otherwise, drastic measures may be necessary, such as closing factories – something unprecedented since the company was founded in 1937. Antlitz's statement, made in the presence of CEO Oliver Blume, resonated strongly with employees.
According to the executive, the pandemic has irreversibly shrunk the European market. Volkswagen is struggling to adapt to this new scenario and sales of electric vehicles, which previously promised to be a lifesaver, have not materialized as expected.
Antlitz warned that the company could sell up to 500.000 fewer cars this year than it did pre-pandemic. The European market no longer offers the same opportunities as before, and the slowdown in sales puts even more pressure on the automaker.
Employees on alert at risk of layoffs
Antlitz's statement sparked outrage among the roughly 25.000 employees present at the meeting. The workers' council harshly criticized Volkswagen's management, accusing executives of failing to fulfill their responsibilities and burdening employees with management errors.
The closure of factories has become a real fear, especially after the company suggested that this may be inevitable if recovery does not occur within the established timeframe.
Employee dissatisfaction is understandable. Volkswagen has been a solid company for many years, with factories around the world and a consolidated leadership in the European market. Now, with the global auto market facing major changes, the brand needs to adjust quickly to avoid the worst.
Crisis has Chinese competition and loss of ground
Another factor that aggravates Volkswagen's situation is the decline in its position in the Chinese market, which for a long time was one of the biggest contributors to the automaker's profits.
According to Oliver Blume, “there are no more checks coming from China”, reflecting Volkswagen's difficulty in competing with local automakers such as BYD, which recently surpassed the German brand in sales in the country.
A Volkswagen hegemony in China came to an end in 2023, when it lost its sales leadership to its Chinese competitor.
This change is seen as a hard blow for the company, which has always relied on the Chinese market to balance its finances.
O failure to maintain leadership in China directly impacts Volkswagen's operations in the rest of the world. With a slowing European market and strong competition in Asia, Volkswagen needs to find quick solutions to survive the new dynamics of the automotive sector.
Recovery strategy
Despite the difficulties, both Antlitz and Blume reaffirmed Volkswagen's commitment to becoming a profitable and relevant brand again.
To this end, they highlighted the need for reduce costs and adjust production to the current market reality. According to Blume, Volkswagen is implementing measures to ensure its long-term survival, and the effort needs to be collective.
The challenge is launched. Volkswagen, which was once the world's sales leader, is now struggling to survive in a more competitive market with less room for maneuver.
Factories in Germany are under threat of closure, and the brand needs to accelerate its recovery to prevent the worst from happening.
Pressure comes not only from competitors, but also from employees themselves., which require company management to assume its responsibilities and protect jobs.
In other words, over the next two years, the company will need to adjust its production, cut costs and, at the same time, find a way to regain your position in the European and Chinese markets.
If the automaker fails in its recovery, Volkswagen's history could change drastically, with consequences for both the company and its thousands of employees.
Can Volkswagen turn things around and avoid factory closures? Or are we about to witness the collapse of one of the world's largest automakers?
