Volkswagen said Tuesday that 3,500 workers in Germany have signed up for severance packages as the company tries to cut high European labour costs.
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Chief Financial Officer Dieter Poetsch, speaking to analysts at a conference in London, said that the employees had agreed to the severance plan.
Since June, about 85,000 VW workers in western Germany have been offered severance packages ranging from EUR41,000-EUR250,000 depending on their salary level and years of service. The offer is open until June 30, 2007.
Volkswagen disclosed last year that it intends to cut as many as 20,000 jobs in Germany in a bid to rein in costs and streamline production.
Volkswagen AG intends to keep driving profit growth beyond the record EUR5.1bn before tax it has targeted for 2008, Poetsch also told analysts.
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By GlobalDataAhead of negotiations on September 8, with German union IG Metall over reinstating the 35-hour work week, Poetsch said the profit target marked just one step in the overall goal to comprehensively restructure the company.
VW wants productivity improvements, job cuts and longer working hours in Germany to improve results at its core VW brand, which has the car world’s highest labour costs. However, labour officials worry that returning to a 35-hour work week from a 28.8-hour week now could cost far more than the 20,000 jobs VW says are at risk from the reorganisation.
