Volkswagen Faces €16 Billion Cost for Massive Restructuring Plan

Volkswagen is estimating the total cost of its sweeping restructuring program, including job cuts and potential plant closures, at around €16 billion ($18.6 billion), a person familiar with the matter said on Thursday. The German automaker is undertaking its biggest-ever restructuring as it faces intense competition from Chinese manufacturers, tariffs and excess production capacity.

The plan includes exploring alternatives for four German plants that are expected to run out of models over the next decade, while the company could eliminate up to 60,000 jobs worldwide. Around €10 billion is expected to be allocated to costs associated with the workforce reductions, according to the source. Volkswagen declined to comment on the reported restructuring costs.

Production phase-outs at the Emden and Zwickau plants are estimated to cost about €1 billion each, while the Neckarsulm and Hanover facilities could incur around €2 billion each. The restructuring pact, approved by Volkswagen’s supervisory board last week, marks a major effort by Europe’s largest carmaker to reduce costs and address mounting competitive pressures.

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