Volkswagen is doomed unless unionised workers at its expensive German plants accept sharp cuts in costs and jobs, the carmaker said on Tuesday.

"There is no alternative for our group," embattled chief executive Bernd Pischetsrieder said, according to Reuters, which noted he was sticking to his hard line despite a boardroom split between shareholder representatives and labour leaders who have half the seats.

"Unless in particular the traditional German plants are restructured, no long-term future for the Volkswagen group would be conceivable, even if all the other parts of the group reach their earnings targets," finance chief Hans Dieter Poetsch reportedly said.

Reuters noted that the stand-off in Volkswagen's supervisory board has raised questions about whether Pischetsrieder will keep his job beyond next year, but he showed no signs of backing down on a revamp that has made Volkswagen a top restructuring play for investors.

"I would like to lead the company to success together with my colleagues," he reportedly told a news conference. He acknowledged he needed staff support but said the debate about his role should be conducted by the supervisory board, not in public.

Pischetsrieder added he was confident Volkswagen would achieve its EUR5.1bn (US$6.10bn) pretax profit target in 2008, the news agency said.

"The comment that there is no long-term future for VW, especially for its German plants, is decisive," German bank JRP analyst Michael Punzet told Reuters, adding: "This strengthens confidence that restructuring will be driven forward no matter how the power struggle at the top of the company turns out."

The report said that Volkswagen repeated that up to 20,000 jobs at its struggling VW brand were at risk over the next three years due to a restructuring programme aimed at boosting productivity, reaching full capacity and reorganising its car parts operations.

According to Reuters, it said it had to consider closing at least some car parts operations, but added three such plants in Germany were safe. Losses in the high-hundreds-of-millions of euros at its traditional western German VW plants, the highest labour costs in the industry and an earnings collapse in its two key foreign markets, the US and China, have kept VW reeling.

Volkswagen reaffirmed it expects higher operating profit this year, but only before one-off effects, which were impossible to quantify as yet, Reuters said.

Group deliveries rose 15 percent to around 790,000 vehicles in the first two months of 2006, but the company only expects a slight increase for the full year, the report said.

Presenting full results, VW showed that its VW Brand Group - which includes VW, Skoda, Bentley and Bugatti - swung to a profit of EUR638m last year from a EUR25m loss.

North America narrowed its loss to EUR843m from 902m but its Asian business deteriorated significantly, Reuters added. The Chinese joint ventures swung to a loss of EUR119m from a profit of EUR222m, while the Asia/Pacific region sank to a loss of EUR88m from a profit of EUR208m.

Dresdner Kleinwort Wasserstein analyst Arndt Ellinghorst told Reuters news that Volkswagen brand group had generated its best fourth-quarter operating profit since 2001 had undermined the company's case that it needed more cost cuts.

"It will be especially hard to convince the market and especially the unions that Volkswagen brand can only survive with deep restructuring," he told the news agency, particularly after VW raised its 2005 dividend and cancelled all the treasury shares it held.