For now, Pischetsrieder plans to negotiate with labor representatives.The strategy was approved by the directors of the supervisory board, which includes Piëch, Lower Saxony governor Christian Wulff, IG Metall union president Jürgen Peters and Bernd Osterloh, a member of the Presidium of the Supervisory Board.Why should the company build even more cars at its most expensive locations?
Although Lower Saxony Governor Wulff and Porsche CEO Wendelin Wiedeking, who represents VW's new major shareholder Porsche on the company's supervisory board, have spoken out in favor of renewing Pischetsrieder's contract, many on the employee side doubt that Pischetsrieder is the right man for the job.According to a VW executive, the company won't be able to avoid closing an assembly plant if that happens.The factory in Brussels, where the Lupo and Golf models are produced, is considered especially at risk, because it would make sense to shift production of the cars that are currently being assembled there to the company's German plants -- which would then be utilized at closer to their capacity levels, making them more profitable.Whereas General Motors, Ford and Daimler Chrysler announced their restructuring program some time ago, Volkswagen wasn't ready to follow suit until Friday of last week.After a meeting with the heads of the company's Supervisory Board, Pischetsrieder finally told employees the bad news: Fully one-fifth of the 100,000 jobs at Volkswagen in Germany are in jeopardy. Instead, employees will be encouraged to accept early retirement or other payout packages.
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Although Bernhard is addressing these problems, they probably can't be solved until the next model is rolled out. Even though the brand group earned a small profit in 2005, VW could quickly find itself plunging into the loss zone if it is forced to shave off a few percentage points on its customer discounts.Demanding more from the workforce Pischetsrieder and Bernhard essentially agree that labor costs must be reduced, which can only be achieved if employees agree to work longer hours for the same pay.At Germany's International Automobile Show in Frankfurt five months ago, Volkswagen brand director Wolfgang Bernhard said that Europe's biggest automotive group is in trouble, and that unless the company can cut costs drastically and quickly, Volkswagen will have "no future." Bernhard even went so far as to say that without reform the Wolfsburg-based company would find itself in the same position as battered US giant General Motors. "We have to move quickly -- and not crawl -- if we hope to save this company," Bernhard said.There was a general consensus that something had to be done, and that it had to be done quickly -- although by no means with shock therapy.