The automaker's labor representatives are fighting against these additional savings.
The Volkswagen brand is looking for even deeper cost savings in the wake of its international diesel emissions scandal, and the company’s labor union in Germany is starting to push back. In total, the division wants $4.1 billion (3.7 billion euros) in additional savings by 2021, and those reductions are on top of a $5.5-billion (5-billion-euro) in cuts that the company started in 2014.
According to Automotive News, management and the company’s German labor representatives can’t come to an agreement on the cuts. Making the negotiations even harder, about $3.3 billion (3 billion euros) of the savings would come from changes to the operations in Germany. The workers representatives want the automaker to provide them with fixed numbers for future production quotas and investments.
"A collapse of the future pact continues to be possible because we are still lacking essential commitments from the company," the VW works council told employees in a memo, Automotive News reported.
VW management and labor leaders recently came to a compromise for avoiding layoffs. Rather than actively getting rid of workers, the automaker simply doesn’t plan to rehire 25,000 employees when they retire. This solution allows the business to reduce its workforce, and the works council can boast about saving the jobs.
Over a year after the start of the emissions scandal, we are beginning to see its toll on Volkswagen Group – particularly the VW brand and Audi. The judge handling the case in the United States recently said that was “strongly inclined” to accept the automaker’s $10.03 billion buyback program for about 475,000 vehicles with the 2.0-liter TDI engine. He also agreed to a $1.2 billion settlement with the brand’s dealers.
Budget cuts at Audi will delay the luxury automaker from building a tech center and test track in Ingolstadt, Germany. The site would have spearheaded development of autonomous driving systems and electrification.
The VW brand will dig its way out of these problems in part by bringing an onslaught of new products to the U.S. There will be plenty of additional crossovers in the lineup, including the Atlas and long-wheelbase Tiguan. In addition, VW Commercial Vehicles and Skoda are also at least considering entering the American market, too.
Source: Automotive News Europe