Volkswagen Restructuring Approval Should be Well Received by Investors

Dow Jones09-04

0558 GMT - Volkswagen's transformation plan has been approved by the supervisory board, which should be positively by the market received when shares resume trading today, Bernstein analysts write. "Especially the planned reduction in forward capital expenditure and research and development by 16%," the bank says. One of the most controversial aspects of the proposed plans, that four German plants would close when existing models phase out between 2031 and 2034, was softened by pledges that no factory would be immediately abandoned. Contentious site decisions will now instead be worked through over the coming months, with Volkswagen stating that alternative uses for the plants will be explored. A workforce adjustment of around 50,000 positions worldwide is planned though, to align capacity with market demand, technological change and competitive pressures.

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