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New VW CEO tells staff: Changes won't be painless

2015-10-06 13:43

RESCUE MISSION: New VW Group CEO Matthias Mueller has started the challenging task of rescuing the company out of its emissions crisis.Image: AFP / John Doughall

Wolfsburg, Germany - New Volkswagen chief executive Matthias Mueller warned staff at a meeting on Tuesday (October 6) that changes at the company would not be painless, the first sign that jobs could be cut in response to a devastating diesel emissions scandal.

Mueller said: "Technical solutions to the problems are within view. However, the business and financial consequences are not yet clear."

"Therefore we are putting all planned investments under review. What is not urgently needed will be scrapped or delayed," Mueller added. "And therefore we will adjust our efficiency programme. I will be very open: this won't be painless."

Investments on hold

Volkswagen will have to place all projects and investments under review, the automaker's top labour representative said on Tuesday.

Read: Top 10 'most valuable' car brands

Bernd Osterloh, head of VW's works council told more than 20 000 workers at a staff gathering in Wolfsburg, Germany: "We will need to call into question with great resolve everything that is not economical.

"Together we will convince the financial markets of Volkswagen's strength."

Osterloh called for workers and management to rally together to overcome the biggest business crisis in its 78-year history.

Volkswagen is under huge pressure to get to grips with the scandal which has wiped more than a third off its share price, forced out its long-time CEO and rocked both the auto industry and German establishment.

Europe's biggest automaker has admitted cheating in diesel emissions tests on around 11 million diesel vehicles.

A letter sent to German lawmakers and seen by Reuters on Tuesday said that 8 million diesel vehicles in the European Union were fitted with software capable of cheating vehicle emissions tests.

The scandal is not yet having consequences for jobs at VW, which employs 60 000 people at its main factory, but will impact earnings at the core autos division as well as bonus payments to workers, Osterloh said.

However, he added that they would take a close look at the management board's bonuses and said workers would not "foot the bill for wrongdoings of a group of managers".

More on VW emissions scandal:

Emissions scandal: VW's S.Korea sales fall 7.8%
Poetsch sees scandal as threat to VW's viability

Sweden to send VW pollution tax bill?
Emissions scandal: Volkswagen recall 'likely'
Volkswagen scandal: UK sales suspended
VW crisis: 700 000 SEAT cars affected too
Emissions scandal: Affected VWs to be recalled
VW's German hometown 'freezes' budget
Diesel crisis: 2.1 million Audis affected
VW's diesel crisis: 'I want to turn in my vehicle'

'Tsunami' of legal trouble for VW emissions saga

Emissions scandal: Now SA affected?
Emissions scandal: How VW's 'defeat device' works
Emissions scandal: BMW implicated?
VW to start firings over emissions scandal


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