BERLIN (Reuters) – Volkswagen is exploring a series of measures to cut costs at its core brand, including a 10 percent cut and a two-year wage freeze, in a bid to save 4 billion euros ($4.5 billion), the company reported on Sunday. German newspaper Handelsblatt, citing sources within the company.
The automaker is under increasing pressure to cut spending in a tough economic environment. Workers, meanwhile, criticized management for failing to present a clear strategy despite promises of a new plan being developed.
According to Handelsblatt, Volkswagen management discussed several potential cost-cutting measures. These include capping bonuses for executives and studying the possibility of closing certain production sites in Germany.
Contacted by Handelsblatt, a Volkswagen spokesperson declined to comment on ongoing negotiations with the company’s works council and IG Metall, Germany’s powerful metalworkers’ union.
Since the beginning of October, Volkswagen management has met weekly with employee representatives from its German factories to analyze cost reduction possibilities and the models that will be produced at each site.
Negotiations over wage increases are being handled separately, according to a union spokesperson, and the next official meeting is scheduled for October 30.
(Written by Riham Alkousaa; Kate Entringer)
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