Volkswagen AG has said that it plans to cut its work force in Germany, complaining that its factories have “several thousand” surplus employees, despite rising demand for its cars.


The company “has surplus manpower of the order of several thousand employees at its German sites, in particular Wolfsburg,” Volkswagen said in a statement today to the Frankfurt exchange. The company reiterated that it expects operating profit and pretax profit to rise in 2005.


Volkswagen said it would extend an existing early-retirement program to more workers and that others would be offered termination packages to persuade them to leave.


Chief Executive Bernd Pischetsrieder plans to cut worldwide costs by 3.1 billion euros ($3.9 billion) this year. Last year’s net income of 677 million euros was down 77 percent from 2001’s figure of 2.9 billion euros. Pischetsrieder will give details of the plan at a meeting with employees today in Wolfsburg.


“Without basic restructuring, the losses at the Volkswagen brand won’t be eliminated,” said Ferdinand Dudenhoeffer, who heads B&D Forecast, in an analysis released yesterday.


VW’s share price rose strongly today.


“Despite rising sales, the Volkswagen Group still has considerable over-capacity,” a VW statement said. “These measures apply to employees in all areas, including senior managers.”


VW suggested the cuts could be made largely at its flagship plant in Wolfsburg, even if it is chosen to produce a new compact sports utility vehicle.


“This would be an important decision for the site. However, it would not alter the fact that Volkswagen has surplus manpower of the order of several thousand employees at its German sites, in particular Wolfsburg,” it said.


Chief Executive Bernd Pischetsrieder was due to explain the cuts at a meeting with workers in Wolfsburg on Monday.


At the weekend, the weekly Der SPIEGEL reported that 10,000 of the 103,000 Volkswagen jobs in Germany were at risk. Volkswagen refused to comment on that figure.


Wolfgang Bernhard, head of the Volkswagen brand, said in July he expects the next three years to be even more difficult than at present as the company struggles to contain spending and win customers.