Europe's largest automaker, Volkswagen, is making progress in its efficiency efforts, according to CEO Oliver Blume. By the end of the year, the workforce at Volkswagen AG in Germany, including plants in Saxony and Osnabrück, will decrease by 19,000, according to the text of a speech released Thursday ahead of next week's annual general meeting. More than 28,000 departures have been bindingly agreed upon through 2030. Furthermore, factory costs at German locations have been reduced by more than a fifth.

Volkswagen launched its initial savings programs at the end of 2023 and reached an agreement with labor representatives shortly before Christmas 2024 to eliminate 35,000 jobs by 2030. The first financial effects of these activities are now measurable, Blume stated in the speech. Sustainable cost effects of approximately €1bn have already been achieved. 'By 2030, we are working toward annual net savings of €6bn,' he said. The savings programs are expected to offset a large portion of external headwinds totaling in the double-digit billions.

Tariffs imposed by U.S. President Donald Trump alone cost Volkswagen €5bn annually, both directly and indirectly. The Volkswagen subsidiary Audi does not have its own production facilities in the U.S. and is therefore dependent on imports from Europe and Mexico. Audi continues to evaluate the establishment of a manufacturing site in the U.S., Blume said.

(Reported by Christina Amann, edited by Ralf Banser. For inquiries, please contact our editorial office at Berlin.Newsroom@thomsonreuters.com (for politics and economics) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)