 Two workers install a VW logo in the wall of a Volkswagen center in Berlin |
Feb. 28 (Bloomberg) — Volkswagen AG, Europe’s largest carmaker, said it will cut all 16,500 temporary jobs in global operations as the recession and tight credit sap purchases.
“There’s no way around this,” Chief Executive Officer Martin Winterkorn said in an interview with Germany’s weekly Spiegel magazine published today. The financial crisis “is really brutal,” the CEO added. Company spokesman Stefan Ohletz confirmed Winterkorn’s published remarks by phone.
Responding to the worst car markets in almost two decades, Volkswagen shuttered five German factories this week, affecting two-thirds of its 92,000-strong German workforce. That’s on top of a three-day shutdown at the main plant in Wolfsburg.
Production is being cut after Volkswagen’s group vehicle deliveries plunged 21 percent in January, even with a line-up of models such as the Golf, Polo and Fox that is regarded as well- suited to customer requirements for smaller, less-costly and more fuel-efficient cars.
German car sales will probably drop 6.5 percent to 2.9 million vehicles this year, the lowest since reunification in 1990, according to Germany’s VDA automakers’ lobby.
Volkswagen has no plans at the moment to extend plant closures beyond the first quarter, sales chief Detlef Wittig said Feb. 6. The company has so far avoided cutting regular jobs and may rely on trimming weekly hours to adjust production as the economic slump stifles demand.
“I see no problems here for this year,” Winterkorn told Spiegel. “Only if things can’t continue on that basis, one may need to consider other steps.”
Volkswagen is scheduled to outline its business prospects for 2009 at the annual press conference on March 12.
To contact the reporter on this story: Andreas Cremer in Berlin at [email protected].
Last Updated: February 28, 2009 11:35 EST
Source: Bloomberg