Volkswagen's Tradition Meets Transformation: A Bold Experiment in Cost-Cutting

Volkswagen's Germany cost-cutting deal, emphasizing collaboration between managers and workers, aims to reduce 35,000 jobs and boost productivity. Amid investor skepticism, the agreement stresses local cooperation rather than top-down changes, avoiding strikes while ensuring plant futures. With high stakes, VW must align cost-cutting and future sustainability successfully.

Volkswagen's ambitious cost-cutting deal in Germany, despite its radical discourse, leans heavily on its foundational tradition of cooperation between managers and workers, according to company insiders.

This has left some investors wondering if Volkswagen can fulfill its promises of reducing capacity and cutting 35,000 jobs, crucial for survival amidst weak demand and inexpensive Chinese competition.

The agreement assigns each factory a cost-reduction target, with project teams of labor reps and managers tasked to meet it, ensuring productivity as cars produced per worker increases.

(With inputs from agencies.)