Downsizing At VW Arrives

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Downsizing At VW Arrives
Downsizing At VW Arrives

Video: Downsizing At VW Arrives

Video: Downsizing At VW Arrives
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The high severance payments are downright tempting for VW employees. So far, more employees than expected have accepted the favorable terms of the severance agreements.

Europe's largest car manufacturer, Volkswagen, is making better progress than expected with its job cuts through severance agreements. Since the announcement of the particularly favorable conditions three weeks ago, 1,000 employees have already signed severance agreements, a VW spokesman confirmed in a report by the “Bild Zeitung”. And he added: "That is above the expectations we had for the start-up phase."

Long waiting list

Those affected are mostly between 31 and 40 years old = and more than eleven years at VW. They received amounts of around 150,000 euros. There is also a long waiting list of interested parties who want to have a severance talk.

The company still did not want to comment on the expected total number of staff cuts at Volkswagen. Labor director Horst Neumann recently named a number of around 20,000 jobs that would no longer be needed if the VW plants were to compensate for productivity disadvantages. Industry observers are even assuming an even higher number that would have to be deleted in order to renovate the traditional brand.

Up to 250,000 euros

In order to accelerate the downsizing, VW had made around 85,000 employees in the six West German plants an offer with improved conditions for voluntary termination agreements. Depending on income and length of service, severance payments from 40,680 to almost 250,000 euros are offered. There is a surcharge of 54,000 euros for those who make quick decisions and who leave the company by the end of September. Industry insiders have calculated that VW will cost the program more than a billion euros.

In addition, around 6,000 VW employees have signed partial retirement contracts since the end of 2003 and are therefore leaving early. In addition, there is natural fluctuation that exists in every company and that can also be used to cut jobs.

Graduation at the end of July

In February, Volkswagen announced a far-reaching restructuring program for its low-income core brand VW Passenger Cars and thus put 20,000 jobs to the test. In order to reduce costs, the top management has also called for working hours to be extended to 35 hours without wage compensation. So far, the four-day week with 28.8 hours has predominantly been used in the West German VW plants. VW boss Bernd Pischetsrieder wants to conclude the talks with the works council and the union by the end of July.