Part of the massive $10.9 billion savings program will include partial and early retirements.

Volkswagen has long been a dominant force in Europe. The popular Golf used to be the best-selling car on the Old Continent for years. But things have changed recently with Toyota growing Stellantis having so many brands under the same corporate umbrella. Add Renault’s revitalized portfolio into the mix and VW certainly has reasons to worry.

Lest we forget the coronavirus pandemic and Russia’s invasion of Ukraine wreaked havoc on VW’s supply chain, creating huge bottlenecks. The Wolfsburg-based automaker has yet to fully recover, and the future isn’t looking great. In June, the company announced plans to cut costs by a massive €10 billion ($11B), and now Reuters reports VW CEO has admitted the company he is running is no longer competitive.

The news agency got a hold of a post published by VW on its intranet in which CEO Thomas Schäfer said: “With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand.” The statement was allegedly made at a staff meeting held in Wolfsburg during which Gunnar Kilian, a member of the board of management responsible for human resources, said some of the savings would be achieved with partial or early retirements.

The cost-cutting plan will be finalized by the end of this year and Kilian said the majority of savings will be realized through other measures. VW needs the money to build its electric future and roll out the SSP platform that will underpin a variety of models, including the ninth-generation, electric-only Golf. It’s also working on an evolution of MEB while engineering a cheaper variant for small, front-wheel-drive EVs like the ID.2.