VW, labour bosses to jointly set crisis strategy

Previous announcement broke German rules on co-determination: Labour leader
|hrreporter.com|Last Updated: 11/09/2015

BERLIN (Reuters) - Volkswagen's top executives and labour leaders will jointly develop cost-cutting plans and spending targets in coming days, closing ranks as the carmaker faces multi-billion-euro costs from emissions scandals.

VW's ability to push through steps to cut spending by one billion euros ($1.08 billion) per year through 2019 at its core division was challenged by its works council, signalling an internal battle is looming at a company already assailed by regulators, investors and customers.

"In the current difficult situation we must take joint decisions which pay heed to the profitability as well as employment," chief executive Matthias Mueller said on Monday in a joint statement with the works council.

Works council chief Bernd Osterloh said last Friday the announcement of the cuts by VW brand chief Herbert Diess had broken German rules on co-determination by executives and labour, and demanded immediate talks with company bosses.

Labour leaders are irritated by Diess who four months after taking the helm at the VW brand has also ordered a freeze on managerial promotions in a move that limits the clout of the works council, one source close to VW's supervisory board said on Monday.

"The challenges are huge but the workforce is backing the company as long as we manage to come up with a balanced strategy for investments, savings measures and future projects," Osterloh said on Monday.

Both sides pledged to meet over the next ten days. VW's supervisory board is due to approve spending plans on plants, equipment and technology for coming years at a meeting on Nov. 20.

The 20-member panel, which gives nine seats apiece toworkers and shareholder representatives, met at the Wolfsburg headquarters on Monday to discuss latest findings on the diesel emissions scandal and the manipulation of carbon dioxide emissions data.

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