Volkswagen’s labour representative decided to designate a new vehicle model to Germany, pushing the carmaker’s management board to increase the capacity utilisation.
The 3.8 percent fall in first-half group vehicle output in Germany grows concern to carmaker’s powerful unions, pushed by decreasing demand for the Golf and Passat models, could cause further cuts in Volkswagen’s (VW) high-cost home market.
Last November, Europe’s largest automaker agreed with unions to slash thousands of available job positions through natural reduction and reduce R&D costs under an agreement to strengthen the core brand.
VW’s core factory was employing over 60,000 people and closing with little demand for the ageing Golf to counter any weakening at Wolfsburg. The management should improve assembly lines to be able to create an additional 40,000 Tiguan sport-utility vehicles (SUVs), works committee chief Bernd Osterloh said.
“A high capacity utilisation of German plants is crucial for the success of the company and the jointly agreed future pact,” Osterloh said on Wednesday to Reuters. “Only by means of a high capacity utilisation, we can achieve the productivity targets.”
The carmaker intends to boost productivity at its German factories by about 7.5 percent and by 5 percent in 2019 and 2020, adding on fixed-cost cuts of R&D, procurement and production operations.
A turnaround at the VW brand is a solution to recovering the group’s wealth following the diesel emissions test-cheating scandal, investors have said.
The carmaker had allotted another 500 million euros ($587.20 million) in cost savings on top of the 1.5 billion of productivity gains already computed this year, without presenting details, said Osterloh, a member of VW’s supervisory board.
Emden, and Zwickau, Osterloh said that VW’s works council desire the new model to be allocated to one of the three auto-making factories in Wolfsburg.