The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
Manufacturing Manufacture For Transport Equipment Manufacture Of Motor Vehicles, Trailers And Semi-Trailers 29.1 - Manufacture of motor vehicles
20,200 jobs Number of planned job losses
Announcement Date
9 February 2006
Employment effect (start)
1 February 2006
Foreseen end date
31 December 2008
Description
Volkswagen, Europe's largest car maker, has announced a restructuring plan that might cost up to 20,000 jobs over the coming years. Volkswagen points to its wage costs that are substantially higher than those of its competitors. However, VW wants to avoid direct dismissals. On 20 July 2006, German car manufacturer Volkswagen announced to cut 200 out of 1,000 management jobs in Germany. This announcement follows the decision adopted in autumn 2005 to reduce blue and white collar jobs in Germany by 20%, which is to say to cut 20,000 jobs. The car manufacturer has to use voluntary measures to reduce the work force because it is bound by a November 2004 agreement guaranteeing employees' jobs in exchange for a wage freeze that will eventually save 2 billion a year. The company thus offers financial compensation to blue and white collar workers at plants in Wolfsburg, Salzgitter, Kassel, Braunschweig, Emden and Hannover in case they leave the company volunarily. To reach the number of 20,000 the compensation offers are adressed to a total of 85,000 employees. The offers vary by length of service and current salary. Employees who have worked at VW for more than 20 years may receive as much as 195,480. The lowest payout, 40,680, is being offered to workers with five or fewer years at Volkswagen. Employees who decide to leave by the end of September 2006 will receive an additional payment of 54,000, and those who quit in the last three months of this year will get a 27,000 bonus. By mid-July 2006, more than 2,000 workers had accepted the offers. Another 14,000 workers are eligible for early retirement under an agreement that the automaker reached with the Metalworkers' Union IG Metall in February. The cutbacks are part of a plan to more than quadruple pretax profit to 5.1 billion in 2008 from 1.1 billion in 2004.
Eurofound (2006), Volkswagen, Internal restructuring in Germany, factsheet number 62987, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/62987.
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