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Because fixed costs are too high: Volkswagen wants to retire employees earlier

2021-03-15T07:34:50.002Z

Volkswagen has to save. The Wolfsburg-based car manufacturer wants to retire employees earlier, especially a group division is said to be affected by the austerity measures.



Volkswagen has to save.

The Wolfsburg-based car manufacturer wants to retire employees earlier, especially a group division is said to be affected by the austerity measures.

Wolfsburg - A good 120,000 employees: the Volkswagen core brand employs in Germany alone.

A high cost factor for the Wolfsburg-based company, who want to reduce their expenses in the tough competition with new challengers like Tesla or Apple.

The "fixed costs program" is intended to provide a remedy: by 2023, the company's fixed costs are to fall by a total of 5 percent.

In order to achieve the savings, the group is expanding its partial retirement arrangements.

Volkswagen: New regulation on partial retirement should reduce personnel costs

As the group announced on Sunday, the works council and board of directors negotiated a new partial retirement scheme.

Accordingly, the Wolfsburg-based company will also open the existing offers for partial retirement for those born in 1964. An elegant solution to reduce personnel costs without having to lay off employees.

Volkswagen is also making new offers for early retirement to older employees.

How many employees will take advantage of the Group's initiative remains to be seen.

The

Handelsblatt

expects 5,000 jobs that Volkswagen will cut in this way, while the

dpa

calls a “low four-digit number of employees”.

As the

Handelsblatt

writes, the offer is aimed primarily at administrative employees.

CEO Herbert Diess had denounced the lack of productivity in the corporate administration in the past.

The offers for partial retirement and early retirement should probably streamline the administration.

Volkswagen wants to cut jobs - despite increasing sales

At Volkswagen, jobs may only be cut in a “socially acceptable” manner, since the company will secure jobs until 2029.

There should also be changes in the internal job market.

The “Level Freeze” program keeps the upper staff limit constant, so new job advertisements are to be filled internally.

Works council chairman Bernd Osterloh emphasizes that the job cuts “will not be carried out at the expense of the other employees”.

There will be no “work intensification”, it says in the announcement of the group.

Despite the corona pandemic, sales of the Volkswagen core brand are picking up again.

Even if the carmaker continues to record losses in Western Europe and North America, the important Asian market in particular has improved significantly compared to the previous year.

For February, the Volkswagen core brand reported a 30 percent increase in sales.

Nevertheless, the Wolfsburg have to cut their costs.

The expansion of the e-car range is putting a strain on financial planning.

"Strict cost management is still required in order to finance the necessary investments in the future," says Gunnar Kilian, Member of the Board of Management for Human Resources at Volkswagen AG, in the announcement on Sunday.

The group is working on increasing productivity.

Probably also to overtake US competitor Tesla in the electrical segment.

(

jjf / dpa

)

Source: merkur

All news articles on 2021-03-15

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