Friday, November 18, 2016

Volkswagen will drop by 23,000 positions in Germany, Le Figaro

This is the consequences of the “dieselgate”, which has already cost 18 billion euros to the German giant. The group intends to fulfill € 3.7 billion of savings.

The announcement was expected. The shock is, however, enormous. The Volkswagen group, one of the symbols of the success of German industrial, will drop by 23,000 jobs in Germany by 2020. In reaching this decision, the German giant has been conducting negotiations for months with Bernd Osterloh, a member of the supervisory board, chairman of the Committee and representative of the powerful trade union IG Metall. These measures should help to increase the productivity of German plants of 25%.

Despite these cuts, Volkswagen will remain a leading player across the Rhine. Today, it is 276.000 employees in Germany, and more than 610.000 in the world! The headcount reductions announced concern a little more than 8% of German workers.

” Volkswagen, a year after

The German giant had not, in truth, most of the choice. The trigger factor was the crisis of the “dieselgate”, in September 2015. The manufacturer has spent a provision of € 18 billion in order to take account of the scandal, which has affected 11 million vehicles in the world equipped with a software rigging polluting emissions. And nothing says that the amount will cover all costs related to this matter. All the more that this scandal may not be the only one, because Audi, one of its flagship brands, has acknowledged that some of its vehicles were also a problem on the emissions of CO2, that is to say, their consumption. The american authorities enquêteraient also on this element.

Even for an automaker the size of Volkswagen – the group reached 213 billion euros of revenue by 2015 and made an operating profit (excluding exceptional items) of $ 12.8 billion euro – losses of such magnitude can not leave without a response. The group was absolutely free up more cash, in order to maintain a financial strength sufficient.

The cuts have been decided upon in the research and development expenses. Symbolically, some sports activities have also been arrested, such as the endurance races for Audi or the rally for Volkswagen.

But the plants could not escape the purge. As their profitability, in particular in Germany, is much lower than that of the competitors of Volkswagen. Thus, the objective of this new plan is to increase the profitability of the single-brand Volkswagen at 4%, against a forecast of 2% this year. The PSA group, in comparison, has reached a margin of 6.8% in the first half on his only automotive business!

After these ads painful, the leaders of Volkswagen hope to be able to look with more optimism towards the future. And implement their new strategic plan, which puts the electro-mobility and digitalization in the heart of the strategy. The VW brand could create 9000 jobs in the favor of these investments in the electrical technologies, according to a source cited by Reuters.


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