Volkswagen to cut jobs in Germany
Automotive News, Brands, Business News September 6th, 2005
Volkswagen to cut jobs in Germany
Volkswagen AG happens to be the Europe’s largest carmaker but also happens to be in trouble. They are considering cutting jobs in their worldwide operations by offering early retirements and buyout packages to get back to profitability and cut on losses in operations. The company said in a statement today that they are overstaffed when it comes to having manpower at their plants.
They are particularly referring to Wolfsburg in Germany. The company employs 103,000 people in western Germany, including about 50,000 at Wolfsburg. This happens to be their largest plant worldwide and also their headquarters. The aim is to cut worldwide costing by around 3.1 billion euros.
Volkswagen has said that they are aiming at operating profit and pretax profit to rise in 2005. Audi continues to shine for the group negating the bad performance of the other companies in the group. Some of the other brands under Volkswagen are Seats in Spain and Skoda cars in the Czech Republic.
Whatever decision the company takes, VW has confirmed that they aim to honor a labor agreement reached last November with western German workers guaranteeing their jobs through 2011 in exchange for a wage freeze worth 2 billion euros annually. This means that they just cannot fire employees and would have to offer a decent package to let the workers take premature retirement.
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About
I have been a consumer of VW automobiles for 30 years in the UK. The product is first class.
The retailers who sell VW could do much better. The aftersales experience does not match the product itself.
As an example: BRAKE PIPES. In the UK few VW dealers use steel replacement original pipes. They use copper. In the USA or Germany copper is not used because it becomes brittle quickly.
As I write the UK importer has over 170 coils of steel VW brake pipe in the central UK parts warehouse. The dealers do not order them because “it is hard to bend” or they “do not have the tools”.
I believe the economists call this a market imperfection. I call it laziness.