Volkswagen (VWAGY, Financial) is reportedly exploring a series of cost-cutting measures for its core brand, aiming to save 4 billion euros. These measures may include a 10% pay cut for all employees, a two-year wage increase freeze, restrictions on bonuses for senior staff, reduced employee anniversary benefits, and the closure of some production sites in Germany.
The company is under pressure to reduce spending due to the challenging economic environment and escalating competition in the automotive industry. Despite assurances from the management to develop a new operational plan, employees have criticized the lack of a clear long-term strategy.
Volkswagen is currently in discussions with its works council and the influential German metalworkers' union, IG Metall. Although the wage negotiations are separate, formal discussions on employee wage adjustments are scheduled to commence, indicating the necessity for Volkswagen to maintain a delicate balance between cost management and employee relations during its restructuring process.
Since early October, discussions between Volkswagen's management and worker representatives have intensified. Weekly meetings focus on evaluating the cost efficiency of German production sites and strategizing on model allocations for each plant. These meetings analyze potential areas for cost reductions and determine which models each factory will produce.
