BERLIN (Reuters) – Volkswagen (ETR:) is exploring a series of cost-cutting measures for its core brand, including a 10% pay cut and a pay freeze for two years, as it seeks to save 4 billion euros, the report said. Handelsblatt newspaper. on Sunday, citing company insider information.
The automaker is under increasing pressure to reduce expenses amid a challenging economic climate. Meanwhile, workers have criticized management for failing to present a clear future strategy, despite promises of a new plan in the works.
According to Handelsblatt, Volkswagen management has discussed several potential cost-saving measures. These include limiting bonuses for top employees, reducing bonus payments for employee anniversaries and exploring possible closures of some German production plants.
A Volkswagen spokesman declined to comment to Handelsblatt about ongoing negotiations with the company's works council and IG Metall, Germany's powerful metalworkers union.
Since early October, Volkswagen management has been meeting weekly with worker representatives at its German plants, analyzing where cost cuts can be made and which models will be produced where.
Negotiations over pay increases are being handled separately, according to a union spokesperson, with the next formal round scheduled for Oct. 30.
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