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VW: 2,000 Workers Accept Severance Packages

DW staff (dc)July 18, 2006

Some 2,000 workers at Volkswagen AG have accepted severance packages offered by the carmaker as part of a cost-cutting drive, the company said on Tuesday.

VW workers are cutting their lossesImage: AP

A company spokesman said that the number of employees accepting severance packages meant that the VW is moving ahead faster than expected with recently announced efforts to trim jobs.

Last month, VW said that as many as 20,000 jobs could be cut over the next three years in a drive to make the company more competitive internationally. It offered severance packages to 85,000 workers in western Germany.

Each package is worth up to almost 250,000 euros ($314,000), depending on how long the person has been working for VW, and how quickly he or she is prepared to leave.

Volkswagen has an agreement with workers' unions that there will be no compulsory layoffs until the end of 2011.

Cheaper models

In addition to job-cutting measures, VW has also proposed cutting the manufacturing costs of certain models.

"We have to be able to get into the market with cheaper models," said Bernd Osterloh, head of VW's works council. "If we can pass a price advantage onto our customers, we'll be able to significantly increase our sales volume."

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