Germany: Volkswagen in Crisis, Government Considers Bailout
Volkswagen is set to cut 30,000 jobs and could slash investment by 20 billion euros
Germany’s federal government is evaluating the possibility of emergency state aid to help automobile giant Volkswagen emerge from a deep crisis. According to German Economy Minister Robert Habeck, “the German Federal Government together with the state authorities in Lower Saxony are thinking about how we can support the company. Obviously, society and jobs are of extreme importance to Germany.”
According to German newspapers, automaker Volkswagen is poised to “shed” up to 30,000 jobs out of a total of 130,000 employees. According to the Bild newspaper, “Volkswagen expects to reduce investments by around 20 billion euros in the near medium-term planning, especially in the research and development sector.”
Europe’s automotive sector is going through a very challenging period, with registrations down 16.5% in August 2024 compared to the same period in 2023.
In this dramatic context, the German economy ministry is also “assessing how to address the continuing weakness in sales in the electric vehicle market,” a sector in which Volkswagen is particularly suffering. “Of course, it is a political challenge to ensure that markets have the tools to strengthen and stimulate sales of electric vehicles,” Habeck emphasized in conclusion.
