VW talks with union break down, leaving costs deal in limbo

Mon Feb 13, 2017 11:36am EST
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By Andreas Cremer

BERLIN (Reuters) - Volkswagen's (VOWG_p.DE: Quote) talks with unions over the implementation of its turnaround plan broke off on Monday, both sides said, leaving in limbo a deal on cost-cutting following the carmaker's damaging diesel emissions scandal.

Labour bosses at Volkswagen (VW) halted cooperation with management on issues including overtime work, efficiency gains and apprenticeships last week, saying executives were trying to squeeze greater savings than agreed in November.

And on Monday VW's works council indicated that tensions between its head Bernd Osterloh and VW brand chief Herbert Diess, who have clashed over how to achieve greater savings, had not eased and called for VW group Chief Executive Matthias Mueller to play a greater role in resolving the dispute.

Staff representatives "are clearly committed to the contents and core values of the future pact", a works council spokesman said by email. "They are also expecting this from management."

Diess pledged to make proposals for solving the controversial issues by next Monday when both sides will resume the talks, the works council spokesman said.

Unions say Diess, who established a reputation for cutting costs at BMW (BMWG.DE: Quote), wants to cut temporary workers more quickly and deeply than agreed.

VW has said it cannot keep a large number of temporary staff on its books the way it used to because of shrinking demand for core models such as the Golf hatchback and Passat saloon which accounted for almost a third of the brand's 5.9 million models built worldwide in 2015.

"We would welcome if the group's management would more strongly deal with the implementation of the future pact and the compliance with agreements," the works council spokesman said.   Continued...

FILE PHOTO:  The Volkswagen logo is seen at the Frankfurt Motor Show (IAA) in Frankurt, Germany, September 10, 2013.     REUTERS/Pawel Kopczynski/File Photo