Europe’s biggest carmaker, Volkswagen, is holding talks with union officials on further restructuring. The company’s profit margins are being squeezed by high production costs and it wants to reinstate the 35 hours working week for its German employees from the current 29 hours, without increasing their pay.
Horst Neumann, VW’s personnel director, said: “If the most important car VW produces, the Golf, is in the red, then there is something wrong. We have to put things right together. My impression is that on the workers side, the works committee and the union IG Metall, they do understand the difficult situation VW is facing.”
VW currently has an agreement with its staff for no forced layoffs before 2011. IG Metall’s chief negotiator Hartmut Meine said: ‘We expect concrete commitments from the management, commitments for all six factories in Germany, it’s a question of commitments to product and investments to ensure jobs are safeguarded after the year 2011.”
Worldwide, the VW group’s net profits were 1.1 billion euros last year and are projected to be 1.6 billion this year but the company loses money on cars made in Germany. Volkswagen is using a carrot and stick method – offering a profit-sharing agreement with workers in exchange for a longer work week but also threatening to build the next generation of the VW Golf outside Germany if there is no deal.