Volkswagen said to cut 23,000 jobs, save $3.9 billion with labour pact
The employment reductions will come through attrition, with Volkswagen agreeing to no forced layoffs until 2025
Latest News »
- AAP changes tack: No direct attack on PM Modi, slams BJP instead
- Ivanka Trump must testify in shoe knockoff suit against company, says US court
- Hopes fade in China for 118 still missing day after landslide
- Western, southern states control over 60% of bank credit: RBI
- Narendra Modi must raise H-1B visa issue with Donald Trump: Indians in US
Frankfurt: Volkswagen AG reached an agreement with workers to cut as many as 23,000 jobs and save €3.7 billion ($3.9 billion) in expenses, according to people familiar with the matter.
The employment reductions will come through attrition, with the German automaker agreeing to no forced layoffs until 2025, said the people, who asked not to be identified before the official announcement on Friday at a press conference starting at 9.30am in Wolfsburg. Labour and management reached a breakthrough late Wednesday for the VW brand after intense talks stretching over several months, with additional details for savings across the group ironed out Thursday, said the people.
The labour agreement is critical to Volkswagen’s efforts to accelerate restructuring at its biggest unit and emerge from the worst crisis in its history. The VW brand, which accounts for almost half of the group’s sales, was struggling even before its emissions crisis erupted last year, tarnishing the carmaker’s reputation and burdening the company with at least €18.2 billion in costs for fines and repairs.
In a victory for VW workers, the manufacturer agreed to rule out forced layoffs until 2025 and to build two fully electric cars at German sites, one in Wolfsburg and one in Zwickau, according to the people. The job cuts will come through attrition and early retirement, and the company will add as many as 9,000 positions for new projects like electric cars and digital features, they said. The expense target includes €3 billion at its German factories and another €700 million abroad, the people said.
The new head of VW brand, Herbert Diess, will push forward with a plan to all but eliminate the number of temporary workers and the marque’s factories. The manufacturer will also limit the number of new employees joining the company. VW will offer the 200 best apprentices from a total 1,000 a qualification to become an engineer. But these 200 apprenticeships won’t be filled again.
The VW brand is preparing an overview of its strategic goals for analysts and investors and might provide first details as early as next week, according to the people.
VW late Thursday said in a statement that results of the so-called future pact with workers will be presented on Friday by top officials including chief executive officer Matthias Mueller, VW brand head Diess, personnel chief Karlheinz Blessing and works council chief Bernd Osterloh. Bloomberg