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Business

Indebted VW to cut 30,000 jobs

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Business

Indebted VW to cut 30,000 jobs

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COMING UP:Indebted VW to cut 30,000 jobs

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Transcript

00:00:00
>> Ladies and gentlemen.>> Thirty thousand jobs to go at Volkswagen by 2020. The German car giant trying to balance its books so it can clean up its act. VW needs to pay billions of Euros of fines and settlements imposed for cheating pollution targets, and to fund a strategic shift into electric and self-drive cars, as Reuters Edward Taylor reports from Frankfurt.
00:00:25
>> It's not just optimizing the cost structure of the existing company but it's setting up the company and retooling the factories for a new era away from combustion engines towards electric motors and battery packs.>> Most of the job losses will be borne in Germany where costs are high.
00:00:41
Volkswagen's workers are heavily unionized, so early retirement or voluntary redundancy are the trade-off and savings won't be as high as company bosses were hoping.>> Management of Volkswagen doesn't have a freehand to cut as many jobs as they would like, so they had to go soft, which meant basically opting for a program which is mainly based on attrition.
00:01:03
They're getting rid of 23,000 jobs in Germany at the Volkswagen brand but in exchange for that concession, they had to guarantee jobs of the remaining workforce in Germany for nine years, until 2025. It's a massive compromise.>> Volkswagen has also promised to create 9,000 new jobs making electric cars.
00:01:23
Labor leaders are pleased, but so will VW's rivals be. The plan leaves its profitability lagging behind them.