Volkswagen says has no plans to retain large number of temp staff

BERLIN Volkswagen (VOWG_p.DE) said it has no plans to keep a large number of temporary workers on its books following a media report saying management at the carmaker’s VW brand would retain about 2,000 of them as labor leaders and executives wrestle over the company’s turnaround plan.

Labor leaders at VW last week halted cooperation with top managers on issues such as overtime work and apprenticeships after accusing executives of pushing for greater savings on the back of a cost-cutting plan agreed in November.

Europe’s largest automaker is under pressure to make cuts at high-cost operations in Germany to fund a shift to electric cars and mobility services as it tries to move on from its emissions scandal, while still grappling with billions of euros in related costs.

At the heart of the dispute are allegations by the works council that VW brand chief Herbert Diess is aiming to cut temporary jobs more quickly and deeply than agreed under the so-called “future pact” designed to lift profitability at VW’s core division.

Business daily Handelsblatt, citing unnamed sources, said on Sunday VW has pledged to keep about 2,000 temporary workers on its books and may offer further concessions ahead of a meeting between both sides on Monday to try to de-escalate the row.

A spokesman for the Wolfsburg-based carmaker on Sunday declined to comment on the report but referred to a letter by Diess distributed to staff this week.

“We regret that we cannot keep on board temporary workers the way we used to: The company’s economic situation is giving us little room at present. Retaining temporary workers in a larger way would once again raise the pressure for cutbacks in the core workforce,” Diess said in the letter dated Feb. 10.

VW has said it stands by the future pact but predicts tension between management and the workforce regarding its implementation.

(Reporting by Andreas Cremer, editing by David Evans)