Volkswagen braces for €16 billion in costs for cutbacks, possible factory closures, source says

BERLIN, Sept 10 (Reuters) – Volkswagen estimates the total cost of job cuts and potential plant closures, part of ​a landmark restructuring pact struck last ‌week, at around €16 billion ($18.6 billion), a person familiar with the matter said on Thursday.

The German carmaker, Europe’s largest, has embarked on its ‌biggest ​ever restructuring, citing ⁠an existential battle against ⁠competition from China, biting tariffs and overcapacity.

The plan includes exploring alternatives for four German plants that will eventually ​run out of models during the next decade and a reduction of ⁠around 50,000 more positions.

A ⁠Volkswagen spokesperson declined to comment ​on the costs, which were first reported ​by German magazine Der Spiegel.

The carmaker ‌plans to set aside up to €10 billion by 2030 for the elimination of roughly 60,000 jobs, the report said, ⁠adding those funds would cover measures such as retirement schemes and severance packages.

Volkswagen also plans ⁠to ‌earmark about €6 billion for the ⁠possible cessation of vehicle production ​at ‌those four plants, Spiegel reported. ​The plants’ ⁠future is under review but no final decision has been made.

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(Reporting by Christina AmannWriting by Miranda Murray and Christoph SteitzEditing by Ludwig Burger and ​Sabine Wollrab)