Volkswagen's got some moves in the works, alright! They've reached a pact with their Works Council on a massive savings plan for their core brands, promising a whopping €4 billion improvement in earnings next year and €10 billion yearly by 2026. This is all part of their quest to boost their return on sales from 3.4% to a mighty 6.5%.
The CEO, Thomas Schäfer, announced this "Performance Program" back in the summer, and since October, negotiations ensued like a gangbuster. Schäfer declared after recent talks, "We've taken a major stride in crafting the most holistic program this brand's ever launched."
The Works Council head, Daniela Cavallo, confirmed that the majority of these savings wouldn't be slicing into employee pensions or pay cuts. No, Sir! Instead, they'd be slashing material, fixed, and sales costs. Moreover, the job security agreed upon until 2029 remains rock-solid.
So, how will they shave the fat without cutting people? Extend partial retirements, offer termination agreements with a twist, and maintain the employment freeze started in November. The scrappy Works Council won't tolerate wage cuts or job security cuts, either.
According to Cavallo, this is just the beginning of a billion-dollar plus push for greater efficiency within Volkswagen's powerful family of brands. It seems that old Volkswagen still has some new tricks up its sleeve!
Bonus Info:
- Volkswagen is elusive about job cuts, stating it's all about trimming costs, not heads.
- To achieve these savings without layoffs, Volkswagen is offering selective termination agreements at all levels.
- They've also extended partial retirement options and maintained their recruiting freeze.
- Daniela Cavallo believes that the levers the brand can pull within its Group network will unlock more efficiencies.
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