00:00Volkswagen CEO Oliver Blumman telling thousands of workers earlier that half the firm's additional job cuts are going to need
00:06to happen within Germany.
00:08Bloomberg's Will Wilkes joins us now.
00:10It's a fascinating story.
00:12Oliver Blumman trying to turn around Volkswagen as CEO and this could now mean up to 140,000 job cuts.
00:21But he can't just order them, Will.
00:23What is he supposed to do?
00:24He has to get leaders on board, lower Saxony leaders and so on.
00:30Yeah, exactly, Bonnie.
00:32He's not able just to order job cuts.
00:35Under German corporate law, the supervisory board of a company has to sign off on major strategic decisions.
00:44And on the Volkswagen board, the union and, as you say, lower Saxony effectively have a blocking block where they
00:54can kind of frustrate Blumman's plans.
00:56And they've just had this meeting, which is finished around an hour ago.
01:01And what seems to be coming out is there's a lot of heated words.
01:06The Labour chief is saying trust in Blumman's been damaged.
01:10Blumman's saying we have to press ahead with cost cuts.
01:12But there does seem to be potentially some landing ground around voluntary redundancies and finding alternative plans for the plants
01:20in question.
01:21Yeah, it's fascinating because Volkswagen operating at a 30 percent cost disadvantage, let's say, to its rivals if this doesn't
01:31happen.
01:31I mean, even if this does happen, Will, and I don't know how you operate in the meantime, how is
01:37it going to get back into any kind of shape competition-wise?
01:42Yeah, Volkswagen's got a difficult few years, which the union leaders are also pointing out.
01:47The idea that Volkswagen can hit margins of 8 to 10 percent, the union leader called cloud cuckoo land thinking.
01:57Volkswagen, you know, is facing U.S. tariffs.
02:00It's got competition from new Chinese manufacturers in Europe.
02:03And it's also got declining sales in China.
02:06So it looks like for the next few years, Volkswagen, and as with many other global automakers, it's not just
02:12Volkswagen that faces these challenges.
02:14It's going to be very difficult for them to lift margins substantially.
02:17But Bloomer said it's urgent.
02:20We have to try.
02:21We need to push ahead with these cost cuts.
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