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Volkswagen is going to significantly reduce the cost of its key subdivision

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Volkswagen is going to significantly reduce the cost of its key subdivision

Volkswagen is going to significantly reduce the cost of its key subdivision
October 21
14:00 2016

Volkswagen Group is preparing to reduce the cost of its main brand by about 3.7 billion euro ($ 4.1 billion) by 2021. According to the informed sources, the company has made this decision because of the conflict with the leadership of the trade unions regarding the project of the financial recovery.

The largest European car manufacturer has to save on expensive operations in Germany in order to provide the production of electric and self-managed cars with the finance. The situation is complicated by billions of dollars costs of the company because of the diesel scandal.

Volkswagen will have to reduce the costs by approximately 3 billion euros for operations in Germany, where the company and its largest factories locate. The sources of Reuters, which have been informed about the negotiations between the company’s board and the trade unions, have reported about this.

Promises of investment and the cost reduction are the main obstacles in negotiations between trade unions and the company.

“The failure of the future agreement is still possible, because we still do not have enough meaningful promises from the company”, – reads the letter of heads of trade unions to Volkswagen employees in Germany.

Herbert Diess, Chairman of the Board of Management at Volkswagen, said that the company would be forced to resort to the staff reduction, but the board would not forcibly dismiss employees in the subdivision, which includes more than 200,000 employees around the world – and this is one third of the company’s staff.

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