Report – Volkswagen’s recovery strategy includes cost cutting worth $4 billion image

Following the seemingly never-ending Dieselgate scandal, Volkswagen has allegedly cooked up a recovery plan that includes even more cost savings, but the labor officials are of course trying to fight these additional measures.

The international diesel emissions scandal is taking a hefty toll on the company but the labor union in Germany is now pushing back. Apparently, the VW brand needs to achieve $4.1 billion (3.7 billion euros) in additional savings by 2021, which is actually on top of the agreed $5.5-billion (5-billion-euro) in cuts the company started back in 2014. Apparently, according to the latest rumor on the subject, the executives and the company’s German labor representatives are in disagreement over these cuts – especially because $3.3 billion (3 billion euros) of the savings would be brought in by changes to the home operations. “A collapse of the future pact continues to be possible because we are still lacking essential commitments from the company,” the VW works council said to employees in a memo, reportedly.

Not long ago, VW management and labor officials agreed against layoffs and instead of actively terminating jobs the company would simply stop rehiring people on 25,000 positions when the current employees retire. The toll of the emission scandal is weighing in now – a judge in the United States said recently he was “strongly inclined” to allow a $10.03 billion buyback program for around 475,000 vehicles with the 2.0-liter TDI engine as well as a $1.2 billion settlement with the brand’s dealers.

Via Automotive News Europe