VOLKSWAGEN TODAY ANNOUNCED it is cutting 30,000 jobs in a huge savings plan to help the company recover from the ‘dieselgate’ emissions cheating scandal.

The deal, agreed with workers’ representatives after months of negotiations, will lead to annual savings of €3.7 billion by 2020 and will allow the group to ramp up its investment in electric vehicles, VW brand chief Herbert Diess said.

The job reductions will be at VW’s own-brand unit and will not affect the group’s other brands such as Porsche, Audi and Skoda.

Cuts

Some 23,000 of the job cuts will be in Germany alone, Diess said, adding that these would be mostly through measures such as attrition and temp job losses and not through forced lay-offs.

Volkswagen Passat car being tested for its exhaust emissions. Source: PA

Jobs will also be lost in Brazil and Argentina, two markets where the VW brand is struggling.

He added: “I am very sorry for those affected, but the situation of the brand at the moment gives us little room for manoeuvre.

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.

But the VW group, which owns 12 brands, was plunged into the biggest crisis in its history last year after it admitted to installing emissions cheating software in some 11 million diesel vehicles.

The 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.

- © AFP, 2016

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