I=5
Assessment
The fact that wages will fall by 6% from 2027 indicates that the cost benefits in the next two years could be small.
I=5, VW brand
Collective agreement provides for up to 7 hours reduction in working hours in case of a crisis
According to Business Insider, there is a clause in the collective agreement reached with the works council and which affects 120,000 workers in Germany, that allows Volkswagen brand to reduce the number of working hours to be reduced to 28 hours from the current 35 hours incase of bottlenecks.
The clause provides that before the hourly reduction kicks in, all other measures such as reducing overtime and short-time work should have been exhausted.
“In the event of temporary employment problems or a poor economic situation, the company parties may collectively reduce regular weekly working hours to up to 28 hours per week in order to secure employment. In this case, compensation must be granted," the clause reads.
According to Business insider rough calculations, employees would forego half their pay for 7 hours if their working hours are reduced completely, translating to 10% of their gross salary per month.
According to Reuters, a factory worker in Germany earns around 62 euros per hour.
Assessment
Based on the numbers above, Volkswagen brand pays its factory workers in Germany 1,041,600,000 (62x35x4x120,000). A 10% reduction would save the brand around 100 million euros per month or 1.2 billion euros per year.
I=5, VW brand
Collective agreement is tied to measurable milestones
I=4
Volkswagen is looking to share production costs with Chinese players at its unwanted plants in Germany.
“We’re open for any discussion on any topic with any partner. In a dynamic world, you have to keep all options open," David Powels, VW’s chief financial officer said.
I=7, VW brand
Volkswagen board members want more cost cuts, Handelsblatt reported
Assessment
This makes sense given a recent article that said wage cuts are expected to fall by 6% from 2027. Also, based on the collective agreement details, most of the cost-saving measures will likely come in 2030. But it’s good to see the management championing for more cost cuts.
I agree. I wonder if all those cost cuts are a result of the accountability and culture changes that Blume implemented when he took over. (+ different compensation for management) I think it was part of his ten-point program.
Once we have a better assessment page of his strategy, if it works, and how it relates to cost cuts, we should cross-link it here.
I=4, VW brand
Works council boss Daniela Cavallo doesn’t know how Volkswagen will reduce jobs by 35,000 by 2030.
“The 35,000 jobs that the company wants to cut by 2030 will not disappear as if by magic,” said Cavallo at an employee meeting.
On the other hand, brand’s boss, Thomas Schäfer believes the measures will make the company more superior.
“We will be the technologically leading volume manufacturer by 2030. The number one in Europe, even in the electric age,” he said.
I=4, Porsche
I=5, VW brand
Volkswagen extends partial retirement offer to cover 4,000 more employees, those born in 1968
I=2, VW Group
Volkswagen’s management board agrees to a 11% renumeration cut
I=6, Cariad
Cariad will cut 1,600 jobs or around 25%
Cariad plans to cut 1,600 jobs by the end of the year so as to make it more effective and adapt it to its role in the Group, a company spokesperson confirmed.
“In close cooperation with the brands, we have improved the quality of the software and increased our delivery capability,” said the spokesperson. “The successes are visible.”
The software developers will be exempted from the job cuts.
Cariad currently has around 6,500 workers.
I=6, Audi
Audi to cut indirect jobs by 7,500 by 2029, leading to cost savings of 1 billion euros annually in the medium-term
Assessment
A cost savings of 1 billion euros annually represents 26% of Audi’s 2024 operating profit of 3.9 billion euros, which is not bad. However, medium term could mean 5 years from now, which is far away.