By Andreas Cremer and Jan Schwartz
WOLFSBURG, Germany (Reuters) – Volkswagen and its powerful unions agreed to a cut of 30,000 jobs in their main brand to change to avoid layoffs forced in Germany until 2025, a commitment that still leaves the profitability of the German manufacturer behind that of their rivals.
The plan announced Friday will lead to annual savings in efficiency of 3,700 million euros and increase the operating margin of the brand Volkswagen in a 4 percent by 2020, from an expected 2 percent this year.
The target is still below european opposition such as Renault and Peugeot Citroen, which have been marked a target operating margin of 6 per cent in 2021.
Volkswagen, the largest car manufacturer of Europe, is trying to increase the savings of your biggest business at its headquarters in Germany, where costs are high.
it Also has to find billions of euros to pay fines and agreements after the scandal by cheating on the emissions of their diesel vehicles, in addition to funding a strategic shift towards electric cars and driverless.
The union leaders of Volkswagen said that the management had agreed to avoid forced layoffs in Germany until 2025, a step that paves the way to cut jobs through acquisitions, early retirements and workforce reductions to part-time.
Also eliminated jobs in North America, Brazil and Argentina, said Volkswagen, without being more specific. About 114,000 fewer employees working for Volkswagen in Germany.
The labor leaders agreed to the cuts in exchange for a commitment of the direction of create 9,000 new jobs in the area of electric cars, mainly in factories in Germany.
Analysts and investors welcomed it, welcomed the agreement, which led to the company’s stock is up more than 2 per cent in the German index DAX in the first operations of the day in Frankfurt.
The union leaders were happy with the agreement.
“The most important message is that the position of the main work force are safe,” said the head of the workers ‘ council, Bernd Osterloh, in a press conference in Wolfsburg.
“We have agreed that forced layoffs will be discarded until 2025. When I see what is happening in other companies, this is a great success in difficult times”, said Osterloh.
The agreement with the unions provides for an improvement in the productivity of German plants 25 per cent, said the group in a press conference on Friday.
Volkswagen will manufacture electric cars in its factories in Zwickau and Wolfsburg.
The electric motors will be built in Kassel, and Volkswagen will start the production and development of battery cell in Salzgitter.
Volkswagen will also build batteries for electric and hybrid cars at its plants in Brunswick, said the company.
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