Volkswagen plans 30,000 job cuts, shift to electric cars

Herbert Dies of Volkswagen AG, speaks at the 2016 International CES trade show in January. The company announced a sweeping restructuiring plan Thursday, with a concentration of building electric vehicles in Germany and up to 30,000 job cuts worldwide. Photo by Molly Riley/UPI

WOLFSBURG , Germany, Nov. 18 (UPI) — Volkswagen AG announced up to 30,000 job cuts over five years, and a focus on electric and self-driving vehicles in a corporate restructuring plan.

About 23,000 of the jobs cuts will occur in Germany, representing 20 percent of Volkswagen’s German workforce, and was agreed to by union leaders after eight months of negotiations. Referred to as “The Future Pact,” management and the unions arranged that early retirements will comprise most of the job losses in Germany, and many workers will be moved into high-technology, “future proof” positons.

The company’s electric vehicles will largely be manufactured in Germany, and 9,000 new jobs will be created.

“The next generation of electric vehicles will be made here in Germany, not abroad,” said Bernd Osterloh, the company’s top staff representative.

Volkswagen employs 610,000 people in 31 countries.

The far-reaching overhaul of the company comes after Volkswagen admitted cheating on emission tests of its diesel-powered products, and agreed to pay $19 billion in fines, settlement costs and compensation. About $15 billion of that figure comes in a settlement with authorities in the United States and about 500,000 U.S. customers.

On Thursday Volkswagen CEO Matthias Mueller called the strategy “the biggest modernization program in the history of the group’s core brand. The VW brand needs a real shakeup and that’s exactly what the Future Pact has turned out to be.”

The company is shifting investment toward electric and self-driving vehicles, with fewer employees and a concentrated effort on high-tech factories. It will invest about $3.7 billion in its German manufacturing plants, and plans on a 25 percent improvement in productivity in coming years. The plan is a culture shift for the company, which, even prior to the emissions scandal, was underperforming, with profit margins lower than its competitors.


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