VW slash jobs in Germany
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  1. #1
    Join Date
    May 2008

    VW slash jobs in Germany

    Deal sought with Unions to reduce labour force by 14000.

    VW workers construct a Passat at the automaker's Emden plant in Germany.

    Photo credit: Reuters

    Christiaan Hetzner
    Automotive News Europe
    May 10, 2017 09:42 CET


    Volkswagen hopes to finalize plans this year to reduce its German workforce by a net 14,000 workers by the end of the decade without using to costly severance packages, as the brand seeks to save 3 billion euros in domestic labor costs to help offset the costs of its diesel scandal.

    About 7,000 permanent staff close to retirement have already signed contracts to leave the company early through a part-time scheme abbreviated in German as ATZ.

    VW personnel chief Karlheinz Blessing said: "Based on our assumptions for natural fluctuation, we are still missing another 2,200 to really be in the target area."

    When asked whether he expected this number of employees to sign ATZ early retirement deals by the end of this year, he said: "That's the goal, to check this off the list as much as possible."

    VW also expects that it will eventually have to eliminate all its 4,500 temporary posts in Germany, which, along with reductions through natural attrition, will reach the full net figure of 14,000.

    As part of its so-called "Future Pact" designed to boost productivity by 25 percent over four years, the VW brand is eliminating 23,000 jobs by 2020 in Germany. Simultaneously, however, it plans to add 9,000 employees in new technological fields such as digitalization and electromobility.

    As part of a deal with its powerful labor unions, the overwhelming bulk of that increase will be filled by people whose current jobs are being phased out, translating to a net reduction of 14,000. At the end of the program, that will leave just over 100,000 people still employed by the brand in Germany.

    Flexibility needed

    Blessing warned however that some flexibility in the figures will be needed. While it may be financially attractive at first glance to let go of temporary workers, since it costs nothing, he said exactly this labor force was in general young, able-bodied and qualified.

    Losing them might endanger its efficiency goals, which foresees 7.5 percent productivity gains in the first two years and a further 5 percent in the last two. One consequence has been that the Emden plant, where VW builds the Passat and new Arteon midsize models has received an exemption allowing local management to hire hundreds of temporary workers if needed.

    Blessing said VW could cut more jobs if necessary to achieve productivity targets "using the tools at our disposal."

    Nevertheless, management’s hands are tied. Compulsory layoffs for example have been ruled out under an agreement with unions. Apart from ATZ early retirement deals, natural attrition and fluctuation, VW may end up having to offer bigger severance deals to prompt people to leave the company.

    "Severance packages are the absolute last resort and would only be offered on a case-by-case basis," Blessing said. "There was a big severance package campaign at VW in 2006 and typically what happens under the required 'Social Plan' is that you have those people that have the best chances of getting hired elsewhere leave, while those stay whose chances in the job market are poor."

    The bulk of the 14,000 cuts will not be fully earnings accretive until after 2019 and 2020, however. By the end of this year, Blessing estimates that only about 1,700 permanent employees will have actually left the company under ATZ deals alongside another 2,000 temporary workers.

    "The world doesn't end with the Future Pact, though" Blessing said. Mastering the shift to electromobility with its reduced complexity and fewer hours per vehicle would prove a challenge.

    "We don't know at present how many new jobs might be created through digitalization and mobility services but assuming the overall number of cars sold in Europe doesn't substantially grow, then you can imagine we will have an issue in the future," he said. "Thankfully we have a bit of time to shape this process, and that is one of the most valuable aspects about the Future Pact."

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  3. #2
    Join Date
    May 2008
    And trouble ahead perhaps!

    Mueller sees further conflict with VW unions on cost savings

    Matthias Mueller: "Our path is undoubtedly challenging."

    Andreas Cremer
    May 10, 2017 12:05 CET

    HANOVER, Germany

    Volkswagen Group's top management expects further disputes with labor leaders on cost savings as the automaker pushes an efficiency drive to help fund a strategic shift following the diesel-emissions scandal, CEO Matthias Mueller said.

    "Our path is undoubtedly challenging, it causes friction and sometimes even conflict," Mueller said at the annual shareholder meeting on Wednesday.

    "But all those involved are clearly aware of what's at stake."

    Battery cells

    Separately, Mueller said VW was holding intensive talks with possible partners in Europe and China on battery cells, without being more specific.

    The automaker will soon disclose more details, Mueller said.

    VW is pondering production of battery cells at a new research facility in Salzgitter, Germany, as it plans to triple investment in electric drives to about 9 billion euros ($9.80 billion) through 2022.

  4. #3
    Join Date
    May 2008
    It seems to go from bad to worse

    BERLIN -- Volkswagen Group's top two executives are being investigated over allegations of market manipulation, deepening the carmaker’s legal woes in connection with the diesel scandal.

    CEO Matthias Mueller and Chairman Hans Dieter Poetsch -- along with former CEO Martin Winterkorn -- are being probed by Stuttgart prosecutors over whether they were too slow in telling Porsche SE shareholders about VW’s emissions cheating, said a person familiar with the matter, who asked not to be identified.

    Porsche owns the majority of VW’s voting stock, and the men at the time had dual roles at the holding company and Volkswagen.

    Poetsch, Winterkorn and another executive at the automaker are already being investigated in a separate German probe over possible manipulation of VW stock linked to the crisis.

    VW is facing a barrage of investigations, lawsuits and customer complaints around the world after admitting in September 2015 that it rigged 11 million diesel vehicles to cheat on emissions tests. The scandal has cost it 22.6 billion euros ($24.6 billion) in fines and other expenses so far, and the final tally remains unclear.

    It’s the first time that Mueller has been the subject of a criminal probe connected to the diesel-emission issue. While prosecutors in three cities are looking into various allegations in the scandal, Mueller hadn’t been targeted.

    A VW spokesman declined to comment, while a Porsche SE representative said he had no information about the probe. A spokesman for Mueller said he wasn’t aware of the investigation. Lawyers for Poetsch and Winterkorn didn’t immediately reply to e-mails seeking comment.

    “We believe Porsche SE fulfilled its obligations to comply with capital market rules,” said Albrecht Bamler, a spokesman for the holding company.

    The Stuttgart probe comes after a complaint last summer over the matter from German financial regulator Bafin. Anja Schuchardt, a spokeswoman for the regulator, confirmed that the request was sent last year.

    Bafin also triggered the separate probe against Poetsch, Winterkorn and Herbert Diess over possible manipulation of VW stock. That investigation is lead by Braunschweig prosecutors. Poetsch, Winterkorn and Diess have denied any wrongdoing. VW has maintained it informed markets properly.

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  6. #4
    Senior Member
    Join Date
    Oct 2010
    Good luck with that.

    The amount of bloat, fat and laziness on the typical German assembly plant is unimaginable.

    No matter what you read, every single German manufacturing executive is trying to shift global capacity out of Germany as fast as they can.

    Oh, and good luck getting the german wrench turners to switch to "electromobility". That was the funniest part of it all.
    Hailing from: New England, USA
    Jaguar XF Ownership History: 2009 XF-SC(SV8), 2010 XFR, 2012 V8 Portfolio
    Looking For: Good Handling/Light Jaguar Sports Car and Off-Road Capable Land Rover




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