By Dominic Chopping


Volkswagen Group's chief executive warned staff that urgent measures are needed to secure the company's future amid heightened competition, price pressure and high labor costs just as the European car market contracted.

In a speech to staff at the German auto giant's Wolfsburg headquarters, CEO Oliver Blume said the company has made good progress streamlining its operations and creating synergies while the design and quality of its cars has improved, but labor costs and capacity must now be reduced.

"The current situation is serious. New competitors are entering the market with unprecedented force. The price pressure is immense," he told workers on Wednesday.

"In addition, our labor costs in Germany have now become too high. That is why urgent measures are needed to secure Volkswagen's future."

The comments come days after nearly 100,000 employees, around a third of the company's total German workforce, conducted walk-outs across nine factories in the country to push back against plans for potential factory closures and sweeping cuts to jobs and pay.

Volkswagen has put forward plans to cut workers' pay by 10%. According to the head of Volkswagen's works council, Daniela Cavallo, the company also aims to shut at least three factories in Germany and lay off tens of thousands of staff.


Write to Dominic Chopping at dominic.chopping@wsj.com


(END) Dow Jones Newswires

12-04-24 0617ET