This strategic move, agreed by its powerful labour unions, will significantly boost its profitability, help it put dieselgate-related costs behind and more importantly, place it as a strong competitor in tomorrow’s burgeoning market of electric vehicles.
As per a source familiar with the information at hand, Volkswagen and its labour unions have agreed to a turnaround plan which involves cutting 30,000 jobs by 2021. This cost cutting move is aimed at boosting profitability and move past dieselgate, as the company shifts gear to manufacture electric and self-driven vehicles.
Thanks to these efforts, Volkswagen aims to save $3.9 billion (3.7 billion euros). The step will involve cutting 23,000 jobs in Germany alone, said the source.
The company’s powerful union leaders have agreed to job cuts in exchange for a pledge by VW’s management to create new jobs and make fresh investments in electric cars.
Volkswagen will create 9,000 new jobs by sinking in fresh investments in electric car technology, said the source.
The company’s managers have agreed to build electric cars in Wolfsburg itself, while smaller electric vehicle will be made in Zwickau.
Electric motors for its cars will be manufactured in Kassel while battery cell production is slated to commence in Salzgitter, said the source.
When asked to respond to requests for comments, Volkswagen declined comment.