Europe’s biggest automaker is working on a program to lift returns and better compete with rivals such as Stellantis NV and Tesla Inc., with wilting demand in Europe and China adding urgency to efforts to slim down bloated structures.

Chief Executive Officer Oliver Blume wants the long-struggling VW brand to deliver a sustained gain in earnings of about €10 billion ($10.9 billion) by 2026. Success will partly depend on forging agreements with the company’s powerful labor unions.

The brand needs to bring down excessive administrative costs and make its factories more productive, Schäfer said, adding that an agreement on the necessary measures should be found this year.

“We are not making enough profit with our cars to finance the transformation and our future from our own resources,” he said. “Other manufacturers would close plants in such a situation.”

More details on the efficiency measures are expected to be communicated at a workers’ assembly on Dec. 6. Handelsblatt reported the comments earlier Monday.