DieselGate: Volkswagen To Drop 30,000 Employees

By Ikenga Chronicles November 18, 2016

Volkswagen has disclosed plans to cut 30,000 jobs to ensure a  savings plan to support the German auto giant in recovering from the dieselgate emissions cheating scandal. This is followed by months of intense negotiations with workers’ representatives in order to achieve an annual savings of 3.7 billion euros ($3.9 billion) by 2020 and also allow the group to ramp up its investment in electric vehicles, VW brand Chief Herbert Diess said.

“It’s a major step forward, and undoubtedly one of the biggest in the history of the company,” Diess told a press conference at the group’s Wolfsburg headquarters in northern Germany.

However, the job reductions affects only  VW’s own-brand unit, excluding the group’s other brands such as Porsche, Audi and Skoda.

Diess stated that 23,000 of the job cuts will be in Germany alone, adding that it would be mostly through measures such as attrition and temp job losses and not through forced lay-offs.  Jobs will also be lost in Brazil and Argentina, two markets where the VW brand is struggling.

His words  “I am very sorry for those affected, but the situation of the brand at the moment gives us little room for manoeuvre,” Diess added.

” The so-called “Future Pact” agreed with labour leaders will also see VW create 9,000 positions in areas of new technology, as part of the group’s shift to electric vehicles in the wake of dieselgate. ”

“We are tackling the problems at the root, even if it’s painful. Many didn’t think we could do it,”

“Today, we have shown that Volkswagen can and will change.”

VW’s own-brand unit, which employs 215,000 people worldwide, had already been struggling with profitability, weighed down by high costs and low productivity.

Meanwhile, VW group, which owns 12 brands, witnessed the biggest crisis in its history last year after it admitted to installing emissions cheating software in some 11 million diesel vehicles. The so-called “defeat devices” could detect when a vehicle was undergoing regulatory tests and lowered emissions accordingly to make the cars seem less polluting than they were.

The crisis hurt sales and damaged the image of the proud German company, pushing it to its first loss in over two decades last year

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