VW board to discuss cost cuts on Friday, deal may be weeks away
HAMBURG/BERLIN (Reuters) - Volkswagen's (VOWG_p.DE: Quote) leaders will meet on Friday to discuss prospects for cost cuts and investments, the carmaker's second-largest shareholder said, although a final deal between management and labor leaders may still be weeks away.
Volkswagen (VW) is under pressure to make cuts at high-cost operations in Germany to help to pay for a shift to electric cars and self-driving vehicles while still dealing with billions of euros in costs from its diesel emissions scandal.
VW has earmarked a meeting of its supervisory board on Nov. 18 to approve spending on plants, equipment and models across the multi-brand group until 2021, but needs prior agreement with the works council on restructuring and jobs.
The sheer number of issues facing the 20-member panel including budget goals, job cuts, model strategy and the high cost base of German factories make Friday's additional meeting necessary, two sources close to the supervisory board said.
But if there is no deal on cost cuts and strategy by Nov. 18, VW will be forced to postpone ratification of its group budget, one source said.
"As is known, there are currently talks between management and the works council about a future pact," Stephan Weil, premier of the state of Lower Saxony, VW's second largest shareholder told reporters in Hamburg late on Wednesday, adding "not too much" should be expected from Friday's board meeting.
The shares paid little attention and were trading up 0.3 percent at 119.9 euros at 1042 ET.
COST CUTS REQUIRED Continued...