Mass job cuts loom at VW as profits fall steeply on China sales slump
📰 source: theguardian_business · 💼 business
volkswagen's profits fell 9.5% to €3.5bn in the second quarter, and it cut its revenue forecast for the year — now expecting sales down 3% instead of up 3%. the german carmaker plans to axe up to 100,000 jobs, double what unions had already agreed, mostly in administrative roles. the move comes as vw struggles with a 31% drop in china sales in the first half, hit by cheap domestic competitors and a tough shift to electric cars. its share price fell 1.5% after the results and is down 66% over five years.
ceo oliver blume faces pressure from unions over plans to close four german factories and cut the model lineup by half. aj bell's russ mould said the results expose how western carmakers are being pushed out of china. blume argued restructuring is needed to make vw more innovative and robust. the china slump is also hurting other automakers — bmw cut its profit guidance last month.
why it matters: vw's massive job cuts and profit warning underscore the existential threat legacy automakers face from china's market dominance and the ev transition.
source: theguardian_business
sentiment: -0.80 · impact: 0.70