Volkswagen warned today it is doomed unless unionised workers at its loss-making German plants accept a restructuring programme that entails cuts in costs and jobs.
"There is no alternative for our group," Chief Executive Bernd Pischetsrieder said, sticking to his hard line despite a boardroom split between shareholder representatives and labour leaders who have half the seats.
Finance chief Hans Dieter Poetsch underlined the importance of "ForMotion Plus", which aims to eliminate considerable productivity deficits, reorganise the company's non-core components business and reduce its overcapacities.
"Unless in particular the traditional German plants are restructured, no long-term future for the Volkswagen Group would be conceivable, even if all the other parts of the group reach their earnings targets," he said.
Substantial losses at its traditional western German VW plants, which have the highest labour costs in the industry, and an earnings collapse in its two key foreign markets, the United States and China, have kept the company reeling.
As a result, Mr Pischetsrieder said up to 20,000 jobs at its core VW brand are at risk over the next three years as Europe's largest carmaker strives to reach a pretax profit target of €5.1 billion to at least earn its cost of capital.
After years of protecting western German jobs at all costs - by reducing working hours per week, for example - the VW CEO's blunt message has unleashed a backlash among the powerful labour leaders that have a say in extending his contract.
Chairman Ferdinand Piech said recently it remained open whether Mr Pischetsrieder would keep his job beyond next year, adding that he knew of no one that could survive the united opposition from its workers' representatives on the board.