Pallade Veneta - Crisis-hit VW eyeing plant closures, deep pay cuts: report

Workers' representatives will update VW staff at all 10 German plants about management's latest savings proposals at 1000 GMT, with many bracing for news of thousands of job cuts.

Volkswagen CEO Oliver Blume is seeking around four billion euros ($4.3 billion) in cost savings at the group's VW brand, according to the Handelsblatt financial daily, citing company sources.

To achieve that, VW could close several factories in Germany -- a first in the company's 87-year history.

VW is also eyeing a 10-percent pay cut for all remaining staff and no salary increases in 2025 and 2026, Handelsblatt said. Bonus reductions are also on the table.

The plans are likely to meet with anger from workers' representatives, who have accused VW's leaders of mismanaging the 10-brand group and putting profits above building a sustainable future for the manufacturer.

Volkswagen stunned employees in September when it said it was in need of a deep restructuring and was considering significant job cuts as well as shuttering plants on its home turf.

VW's powerful works council and union bosses have vowed to put up strong resistance against the plans.

But VW argues the cuts are necessary as it struggles with high production costs, a stuttering switch to electric vehicles and rising competition in key market China.

Rival carmakers in Germany's flagship industry are facing similar headwinds, contributing to a wider downturn in Europe's largest economy.

Volkswagen recently cut its 2024 outlook and is due to publish third-quarter results on Wednesday, which are expected to disappoint.

Also on Wednesday, Volkswagen will begin a second round of wage talks with the IG Metall union.

The union has asked for a seven-percent pay rise, which Volkswagen bosses have rejected.

Y.Destro--PV