Volkswagen Group, the world's No. 2 automaker, reported second-quarter (April–June) results this year that fell short of market expectations. Volkswagen Group said large-scale restructuring is inevitable.
On the 24th, CNBC said Volkswagen Group's second-quarter operating profit this year came to 3.469 billion euros (about 5.79 trillion won). That was down 9.5% from a year earlier and well below the market's expectation of 4.3 billion euros.
Volkswagen Group also projected this year's revenue will fall by up to 3% from a year earlier. It reversed course from the previous outlook for 3% growth.
Volkswagen Group, the world's No. 2 automaker, is struggling as competition with Chinese companies intensifies, the shift to electric vehicles is delayed, productivity at German business sites worsens, and trade tensions from the United States pile on.
Volkswagen Group also announced a restructuring plan to cut up to 100,000 jobs across its global business sites. Oliver Blume, Volkswagen Group chief executive officer (CEO), told employees earlier this month that the expense is 20% higher than that of similar corporations, arguing for the need to restructure.
Arno Antlitz, Volkswagen Group chief financial officer (CFO), also pointed to the operating margin stuck in the 4% range, saying in a CNBC interview it is a clear warning sign that we need to restructure.
However, it will not be easy to push through the restructuring plan, which faces opposition from the Volkswagen Group labor union and the state government of Lower Saxony, the No. 2 shareholder. CFO Antlitz said, "We do not wish for workforce reductions or plant closures," adding, "If there are better options to reduce the expense structure, raise productivity, and improve plant utilization, we will of course consider them."