By Kim Richters

Volkswagen AG needs to improve productivity to compete with electric-vehicle maker Tesla Inc., which will include cutting jobs, its chief executive officer said on Thursday.

German auto maker Volkswagen is preparing to overhaul its main plant in Wolfsburg to keep up with its rival's new site near Berlin, said CEO Herbert Diess at a press conference call the car maker held as it released third-quarter results that took a hit amid the global semiconductor shortage.

"There's a challenge from Tesla but we'll keep the pace", he said.

While the company doesn't have a new plan to cut fixed costs so far, Mr. Diess said the plant revamp will involve cutting jobs and includes speeding up manufacturing time. "For sure we need some headcount reduction," he said, without specifying the specific size of the cuts.

The management's comments come amid recent media reports that the CEO is clashing with Volkswagen's works council and the company's supervisory board over possible headcount reduction and plans for the Wolfsburg plant.

Write to Kim Richters at kim.richters@wsj.com

(END) Dow Jones Newswires

October 28, 2021 07:55 ET (11:55 GMT)

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