VW back-pedals on cost cut demands, unions say

Volkswagen has rowed back on some demands for larger cost cuts than previously agreed with unions at its core VW brand, the works council said yesterday, as both sides seek to end a dispute over a turnaround plan.

VW’s labour bosses earlier this month halted cooperation with VW brand management on issues such as raising weekly hours for engineers and limiting apprenticeships after accusing executives of pushing for savings beyond those agreed in the brand’s so-called future pact.

But the works council said yesterday management had abandoned some demands, including scrapping a night shift on the Golf hatchback’s assembly line and tightening performance-based pay rules.

“The works committee has asked management to return to the path towards the future pact,” a works council spokesman quoted labour chief Bernd Osterloh as saying at a staff gathering in Wolfsburg.

“We have meanwhile received a letter from management that pledges that we will return to the contract status,” he said.

Management and labour leaders agreed in November to cut 30 000 jobs at the VW division in exchange for a commitment to avoid forced redundancies in Germany until 2025, a deal that leaves profitability still lagging rivals such as PSA Group and Toyota.

But the plan will not yield the quick savings that brand chief Herbert Diess, wants, and labour bosses have accused him of trying to cut temporary jobs more deeply.

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