Volkswagen weighs wage cuts, bonus reductions in push to save 4 billion euros

BERLIN (Reuters) – Volkswagen (ETR:) is exploring a series of cost-cutting measures for its core brand, including a 10% wage cut and a two-year wage freeze, as it seeks to save 4 billion euros, Handelsblatt newspaper reported on Sunday, citing company insiders.

The carmaker is under increasing pressure to reduce expenses amid a challenging economic climate. Workers, meanwhile, have criticized management for not presenting a clear future strategy, despite promises of a new plan in the works.

According to Handelsblatt, Volkswagen’s leadership has discussed several potential cost-saving moves. These include capping bonuses for top-tier employees, reducing additional payments for employee anniversaries, and exploring possible closures of some German production sites.

A Volkswagen spokesperson declined to comment to Handelsblatt on the ongoing negotiations with the company’s works council and IG Metall, Germany’s powerful metalworkers’ union.

Since early October, Volkswagen’s management has been meeting weekly with worker representatives from its German plants, analysing where cost cuts can be made and which models will be produced at each location.

Negotiations over wage increases are handled separately, according to a union spokesperson, with the next formal round set for Oct. 30.