Improvement in earnings - Volkswagen reaches agreement with works council on savings package
After months of wrangling with the Works Council,Volkswagen has agreed on the key points of a multi-billion euro savings program for the core Volkswagen brands. According to the agreement, personnel costs in the administrative area are to be reduced by 20 percent, but no compulsory redundancies will be made, as the company announced in Wolfsburg on Tuesday. Significantly greater savings are to be made in material and fixed costs.
The program is expected to improve earnings by four billion euros as early as next year and by ten billion euros per year by 2026. The return on sales should then increase from 3.4 to 6.5 percent. Brand CEO Thomas Schäfer announced the "Performance Program" package in the summer. Negotiations with the works council have been ongoing since the beginning of October.
"In recent weeks, we have taken a big step forward in designing the most comprehensive program that the brand has ever set up," said Schäfer. "The agreement with the employee side is an important step towards being able to continue on the path we have taken quickly."
Head of the Works Council Daniela Cavallo said that the jointly agreed course would strengthen competitiveness in the long term without being unilaterally detrimental to employees. "We have not allowed any wage cuts or cuts to our job security." The previously agreed job security will remain in place until 2029.
According to Cavallo, the majority of the savings will now be made outside of the personnel area. In addition to material and fixed costs, this also involves sales and product development. The development time for new models is to be reduced to 36 months. Cavallo: "The billion-euro improvements we are now targeting are an impressive demonstration of the decisive levers that the core brand can use to unlock further efficiency in our strong Group network."
VW left open how many jobs are to be cut. It is not about heads, but about costs, said a spokesperson when asked. In order to achieve the goal without redundancies, partial retirement is to be extended. "We will also offer selective termination agreements at all levels if necessary," added Chief Human Resources Officer Gunnar Kilian. The recruitment freeze in place since the beginning of November will also remain in place.
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Source: www.stern.de
