VW eyes cuts to temporary jobs, working hours

Reuters, BERLIN





Volkswagen (VW) AG is considering a reduction in temporary workers as part of efforts to offset the cost of the emissions scandal, the automaker’s works council said on Saturday.

A spokesman for the council, a grouping of labor representatives within the company, said it would support efforts to secure temporary jobs, but was aware the company’s board was discussing “different scenarios.”

Volkswagen said in a statement that the outlook for its sales and employment levels were unpredictable, having on Friday reported lower deliveries for its core autos division and the 12-brand group as a whole.

The company’s namesake auto brand reported a 4 percent decline in global sales last month to 513,500 cars from 534,800 a year earlier, the Wolfsburg, Germany-based company said in a statement.

The drop at Volkswagen’s largest unit contributed to a 1.5 percent decline in group-wide sales to 885,300 vehicles last month.

“If employment declines temporarily, shortened working hours will be a reasonable option,” Volkswagen said, adding that the executive board was doing everything it could to secure jobs.

Reeling from the scandal over its rigging of diesel emissions, Volkswagen has said it is to cut investment plans at its biggest division by 1 billion euros (US$1.1 billion) a year.

Some analysts have said the scandal could cost Volkswagen as much as 35 billion euros to cover vehicle refits, regulatory fines and lawsuits.

Citing unnamed government sources, daily Bild reported German Chancellor Angela Merkel’s office is looking into whether 6,000 Volkswagen temporary workers could be moved on to the government’s kurzarbeit short-time work program.

The scheme allows companies to preserve jobs by reducing employees’ hours when plant usage is low, with the government compensating workers for part of their lost wages.

The Federal Labor Office has ruled out the idea, already floated by German Minister of Economic Affairs and Energy Sigmar Gabriel, of including temporary workers in the plan, from which they would normally be excluded, but Berlin wants to be prepared for cost cuts at Volkswagen.

Volkswagen Works Council chairman Bernd Osterloh said earlier this month it was not yet clear whether the emissions scandal would affect jobs over the medium to longer term.