VW plans to push ahead with job cuts

Volkswagen plans to step up measures to reduce its workforce.

Volkswagen plans to step up measures to reduce its workforce.

"Despite rising sales, the Volkswagen Group still has considerable overcapacity and will therefore be intensifying its efforts to cut back manpower," the carmaker said on today, toughening its recent rhetoric on the need to slash production costs in Europe.

VW added that it had several thousand more staff than it needed in Germany, and in particular at its main production plant in Wolfsburg, regardless of whether a planned compact offroader based on the Golf will be built there.

The world's fourth-largest carmaker said the measures would be achieved without breaking commitments to its workforce in a labour accord late last year, when VW pledged not to lay off employees in western Germany through 2011.

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"It is planned to extend eligibility for early retirement to employees born in 1951, with a further extension to cover employees born in 1952 if required. Furthermore, individual employees will be offered termination packages," VW said.

The cutbacks apply to employees in all areas, it added, including senior managers.

Following the news, shares in Volkswagen were up 1.7 per cent at €43.14, making it one of the top gainers in the German DAX blue chip index, which was up 0.6 per cent.