Volkswagen Says Cost Cuts Are Urgently Needed As Its Earnings Decline Sharply

Volkswagen said significant cost cuts are urgently needed as it reported a steep decline in third-quarter earnings on Wednesday and faced employee representatives angry at the possibility of the automaker's first plant closures in Germany.

The company reported net profit of 1.58 billion euros 1.7 billion for the July-September period, a 64 decline from the 4.35 billion euros it earned a year earlier. Revenue was only marginally lower, slipping 0.5 to 78.49 billion euros.

The figures came two days after the head of Volkswagen's works council said management had informed employee representatives that it wants to close at least three plants in Germany. The company hasn't publicly detailed its plans.

Volkswagen said in early September that auto industry headwinds mean it can't rule out plant closures in its home country, and must drop a job protection pledge in force since 1994 that would have barred layoffs through 2029.

It cited factors including new competitors entering European markets and economically stagnant Germany's deteriorating position as a manufacturing location. European automakers are facing increased competition from inexpensive Chinese electric cars .