Volkswagen has unveiled plans to cut 23,000 jobs in Germany to help achieve 3.7 billion euros in annual savings by 2020 to turn around its core brand and help fund a shift to electric and self-driving cars following its emissions scandal. Hayley Platt reports.
Volkswagen has been making cars in Wolfsburg for almost 80 years and employs 114,000 staff in Germany. They've seen many changes - but this is one of the biggest. 30,000 jobs are being cut in the core VW brand - 23,000 of them in Germany. (SOUNDBITE) (German) VOLKSWAGEN BRAND CHIEF EXECUTIVE, HERBERT DIESS, SAYING: "This agreement is urgently needed. In the coming years our industry will change more than ever before in history. We will have to invest billions in new electric cars and digital services, because our powerful competitors will be attacking us." Unions have agreed to the deal in return for a promise to cut gradually. There'll be no forced redundancies at home until 2025. (SOUNDBITE) (German) VOLKSWAGEN CHIEF EXECUTIVE, MATTHIAS MUELLER, SAYING: "This future deal will make Volkswagen more efficient, more productive and more competitive and give opportunities in terms of driving new technologies and shaping the trends that will characterise the future of the car industry." The plan will lead to 3.7 billion euros in annual efficiency gains. And lift the VW brand's operating margin to 4 percent by 2020, from an expected 2 percent this year. That's still less than the 6 per cent by 2021 targeted by rivals Renault and Peugeot Citroen. (SOUNDBITE) (English) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "It is just a legacy of that emissions scandal continuing to play through in terms of impact in the operations of VW as it looks to have the right size company in terms of its future operations." Volkswagen must find billions of euros to pay fines and settlements. It also wants to fund a shift towards electric and self-drive cars. Jobs will also go in North America, Brazil and Argentina. But VW has clearly decided to target its biggest business in its home base where costs are high.