VW to talk with labour leaders on cost savings

Volkswagen has agreed to hold talks with labour leaders over priorities for investments and cost savings as the carmaker grapples with the mounting cost of the emissions scandal. The company's top executives will start 10 days of talks with worker representatives led by Bernd Osterloh, a member of the supervisory board.

The board met on Monday at Volkswagen’s headquarters in Wolfsburg, Germany, to discuss cutbacks and the emissions investigation, which gained new urgency last week after the carmaker disclosed carbon-dioxide emissions irregularities on top of its cheating on pollution tests in as many as 11 million diesel vehicles.

"In the current difficult situation, we need to make decisions that take into account profitability as well as employment," chief executive Matthias Mueller said in a statement. "The new framework makes the task challenging."

Volkswagen’s new management is working to maintain fragile relationships with Mr Osterloh and other labour leaders as deep cutbacks loom.

“The workforce stands behind the company as long as we succeed in agreeing on a plan balanced between investment, savings and future-oriented projects,” Mr Osterloh said in the statement.

Also yesterday, the company rolled out a package of incentives for people who bought VW diesels in the US. Volkswagen will offer credit cards worth $1,000 to US owners of certain diesel models that do not comply with government emissions standards.

Owners of nearly 500,000 cars fitted with 2.0 litre TDI diesel engines can apply to receive a $500 prepaid Visa card and a $500 dealership card, as well as three years of free roadside assistance services.

The programme could cost VW nearly $500 million, half of which could flow directly to dealers. – (Reuters/Bloomberg)