VW boss says German wagepact must help cut overall costs

5th October 2004, Comments 0 comments

5 October 2004 , BERLIN - Volkswagen chief executive Bernd Pischetsrieder in remarks published Tuesday said his company's need to cut costs is being driven by consumer demand for more car for less money. In an interview in the Berliner Zeitung newspaper, the VW boss said the company needs a new wage deal with its workers to help cut costs. "Since 2000 the prices being paid have actually been dropping, or the customers as an alternative want clearly more accessories for the same money," Pischetsrieder said.

5 October 2004

BERLIN - Volkswagen chief executive Bernd Pischetsrieder in remarks published Tuesday said his company's need to cut costs is being driven by consumer demand for more car for less money.

In an interview in the Berliner Zeitung newspaper, the VW boss said the company needs a new wage deal with its workers to help cut costs.

"Since 2000 the prices being paid have actually been dropping, or the customers as an alternative want clearly more accessories for the same money," Pischetsrieder said. "This also affects VW and is forcing us to reduce costs even more than before," he added.

"What is clear is that with the wage deal we would be coming closer to our goal of reducing costs by 30 percent by 2011," Pischetsrieder said.

His comments came as VW was getting ready for a second round of wage negotiations with the metalworkers union IG Metall in Hanover on a new pay accord, with the two sides far apart in their demands.

VW wants a pay freeze for some 103,000 factory workers at its six plants in Germany while IG Metall wants job guarantees as well as a 4 percent pay rise.

In the newspaper interview, Pischetsrieder said that despite the current poor car market situation, the future promised strong growth chances.

He cited projections that the world car market will grow to 75 million new cars a year in 10 years, as against the current 56 million cars.

"Next year alone we will be bringing eight new models to the market which will tap into segments currently not being served by us," Pischetsrieder said. "With our mini-van Touran we have shown just how well we can succeed in appealing to new buyer groups.

"However, we do not have the ambition that VW should become the largest car manufacturer, but rather one of the most profitable," he added.

Pischetsrieder also said VW would be sticking with its luxury car Phaeton despite its slow start.

"The strategic decision to enter into the luxury segment remains correct," he said, adding the a company needed time to become established in the luxury market.

"When you make such a decision like that to build the Phaeton, then you need stamina. And we have that," he said.

DPA

Subject: German news
 

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