By on March 10, 2016

Volkswagen Chattanooga Tower

Like ripples in a pool of sulphur-rich oil, the impact from Volkswagen’s diesel emissions scandal keeps spreading.

In a cost-cutting measure designed to mitigate the growing financial damage caused by the scandal, Volkswagen is planning to cut 3,000 administration jobs in Germany, according to Reuters.

The source of unofficial claim comes from two contacts inside the company who contacted German news outlet DPA. How and where the positions would be eliminated is unknown, but the report says the jobs would be gone by the end of 2017.

Volkswagen employs about 40,000 workers in various office positions in Germany, and has already announced it will be shedding temporary administrative positions as an efficiency measure. Other measures include a drop in corporate investment and a company-wide efficiency blitz, which the head of Volkswagen’s worker’s union called “unrealistic” earlier this week.

At Tuesday’s meeting between Volkswagen executives and staff, labor boss Bernd Osterloh made it clear he did not want the planned efficiencies to harm the employment of his members.

Volkswagen is currently in triage mode as it tries to save a patient that is having cash bled from it, seemingly from every pore.

The route forward will mean hard choices, and Volkswagen Group CEO Matthias Müller said Tuesday that the financial pain to the company will be “substantial and painful.”

The recalls of 11 million affected diesel cars has yet to be accomplished, and a fix could still be months away.

In addition to widening investigations in Germany, a fraud case starting in France, and looming environmental fines and a roughly $40 billion lawsuit from the U.S. Justice Department (in addition to a fraud investigation from that same entity), the automaker learned this week that German insurer Allianz plans to sue.

Reports have stated Allianz will go after Volkswagen this month to recoup money it lost when the company’s share prices nosedived after the scandal became public last September.

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32 Comments on “Volkswagen to Slash Office Jobs by Next Year, Says Report...”

  • avatar

    This could be called “Westmoreland Redux”.

  • avatar

    Serious, potentially stupid question.

    Would it be unadvisable to buy a new VWAG product in the coming year or two?

    • 0 avatar

      Well everyone says there are deals out there but it does not seem to be at the dealers, and I have not seen a big drop in used values and I have looked so it seems a wait and see time at VW.

    • 0 avatar

      Especially unadvisable if your username is any reflection of your automotive preferences.

    • 0 avatar

      NOT ADVISABLE pre or post dieselgate.

    • 0 avatar

      @ Sportyaccordy

      Their products drive really really nice. So the answer your question is no. Especially when they are not the only game in town when it comes to driving nice. Signed, TDI owner that has run out of patience with VW.

      • 0 avatar

        I was thinking that if they’d put me into a TSI VW I’d be okay with that. With this news, I’m thinking they’ll end up cheapening the cars further and beating their suppliers into submission for price reductions on parts.

        VW already used enough frail or poorly designed (exhaust flap, HPFP to name two) parts long before the TDI scandal so it doesn’t bode well for future product.

        • 0 avatar

          Diesel Particulate Filter isn’t very robust, and is a $2400 day with eight hours of labor.

          • 0 avatar

            Yep, there’s a third frail yet very expensive part. Maybe they should sell 7th gen Golf wagons with the old reliable 2.slow.

          • 0 avatar
            30-mile fetch

            They did sell a wagon with a reliable engine–the 2.5. No HPFP, no $2400 diesel particulate filter.

            But the press whined about the way it sounded and 40mpg looks way better than 30mpg even if you might have to pay through the nose in other ways to get it, so buyers gobbled up the TDIs and VW discontinued its most reliable contemporary engine and replaced it with a 1.8T with unknown reliability.

    • 0 avatar

      Here’s the thing. My wife’s Rabbit 2.5 has been problem free, aside from a sunroof that likes to tilt open on its own every now and then, and a small oil leak. Excusable for a 9 year old car from anybody. More importantly I was thoroughly impressed by the Golf TSI rental I had. My Civic is in the body shop now and I’ve been riding my motorcycle to work but I think I am going to grab that Golf again for the rain next week. It is several notches above the likes of the Civic/Corolla. So I am imagining a new Tiguan just being a CUV version of that.

      Same time though my buddy has a same year GTI and had all the teething problems of the EA888. Something had his car out of comission for a while- I’m guessing carbon buildup but who the hell knows. I just see customer service going down the tubes and more potential bombshells. Sucks because the cars are excellent!!!!

      • 0 avatar
        30-mile fetch

        I am 6 years and 74,000 miles into my 2010 Sportwagen ownership and it has given me the easy ownership experience of a Toyota. Mine has the 2.5 5cylinder (I feel like a genius now for opting out of the TDI), and I really like the car. But I still cannot decide whether I’d pull the trigger on another new VW.

        I was nervous about VW reliability back then and found back issues of Consumer Reports at the local university library. The 2010 annual car issue had the full reliability stats for every year of that Mk5 platform of Jetta/Golf/Sportwagen going back to 2006. It looked fine, even the 5 year old cars were getting high marks in stark contrast to the 6 year old MkIV cars that preceded them. The problem is, the 1.8T is too new to go back and do the same kind of research, so it’s still a bit of a crapshoot. I’d try to look at the reliability record of GTI since they switched to the 2.0 TSI from the FSI (2008? 2009?) and see if that allays your concerns.

        I have more confidence in the reliability of VW now than I did 6 years ago, but VW is still VW and I would like some data to back up any purchasing decision. And if you don’t need the backseat space of the Golf, I really liked the Mazda3 hatchback with their 2.5. Might be a viable alternative.

        • 0 avatar

          Consumer Reports is what got me to pull the trigger on my wife’s Rabbit. We needed a basic car but the prospect of something as generic as an automatic Corolla just sounded nightmarish. I was considering Saab wagons until I saw the Rabbit deal. Like I said my wife’s car has been problem free but my buddy’s GTI has been problem prone. So I’m at a loss.

          The new TFSI engines are a little better, but there’s still problems. They seem to mainly stem from the cam driven (!???) HPFP. No way around it and it doesn’t look like it’s been fixed. So I’m stumped.

          Real shame because again the Golf TSI was really impressive. I likened it to a baby S-Class. It was just effortless to drive. Deceptively fast, really quiet, smooth but composed handling and ride. The new Tiguan will probably be awesome.

          I don’t know. Maybe we will be able to get a slamming deal on a lease. My wife drives about 10K miles a year so we could definitely do something cheap. If not that then I’m leaning towards that new Sportage.

    • 0 avatar

      I wouldn’t do it. My husband and I are both in possession of VW tdi products. They are good cars, very comfy, drive well, etc. But we also both used to have VW Passat wagons that when they started to age became extremely expensive to keep alive. I know, fool me once, blah, blah, blah…

      I have no faith in the company to consider the consumer. They have demonstrated repeatedly they don’t care about the US market, even if they do have a couple of great cars to sell us (Golf, GTI). I had been dreaming of trading up my Golf tdi for a new GTI, but it would not be worth dealing with VW, IMO.

      Honda is looking better and better all the time.

      • 0 avatar
        30-mile fetch

        Have your current TDIs been treating you well or is it Passat wagon deja vu?

        The new Civic finally looks like a great car again, but if I had just purchased a new one with the recalled 2.0 engine, I would feel very conflicted about Honda reliability even if I had glowing stats from their other models in front of me.

        • 0 avatar

          The Passats were more prone to expensive trouble, but we kept them about 6-7 years each. Our TDIs are 2010 and 2013, and the 2010 (Sportwagen) just had to be towed to the shop for what turned out to be air in the fuel line. We are not mechanically inclined enough to fix these cars ourselves, so I don’t know if that is a problem we could have remedied here at home. But thanks to Michael Horn, VW paid for the tow!

          I like the idea of a Civic hatch, but I am actually drawn to the Fit or maybe a Mazda 3. I heard about the trouble with the 2.0 Civic, but I would prefer the 1.5 turbo anyway.

          • 0 avatar
            30-mile fetch

            Interesting, I’m not sure I would have returned to VW after the Passats. VW seemed to turn a real reliability corner with the 2006+ Jettas and Golfs. But simple is best with VW and the TDI powertrain isn’t simple. Hopefully the fuel line issue is the only problem you face for some time.

            The Mazda3 hatch is a fun and expensive feeling car and would be interesting to compare to the 1.5 turbo Civic.

    • 0 avatar

      I have been pondering this same question but am strongly leaning towards no. I think the potential for cratering resale value and already questionable quality and reliability is just too risky. Not to mention the ethical issues of wanting my money going to such a corrupt and incompetent corporation.

    • 0 avatar

      Just traded in my fairly new Audi Q5. Although a non-diesel, I feared the value of the Audi Q5, as a brand within the VW group, will drop excessively. In addition, my Q5 is part of a class action law suit for excessive oil consumption. I now have another German brand SAV and this one has an engine that was actually made in Germany unlike the Audi whose engine was made in Hungary.

  • avatar

    Anything for efficiency. How very German of them.

  • avatar

    I’m not sure this moves the needle much. An old trick on the investor relations side is to say “to better align with market conditions, we are reducing corporate headcount by X.” Note that this is an actual figure, not a percentage, because the figure quoted is close to the natural attrition count plus whatever short-term reductions are being made. The number doesn’t reflect the sum following any expansions or re-hires, such as reducing Marketing headcount to add pencil-chewers in Legal, for example.

  • avatar

    Much like the big 3 in 2008, there is NO WAY the various levels of German governments lets VW go under. Politically, it would be hard for Merkle to let VW go after bailing out other European countries (and companies).

    • 0 avatar

      Merkel *made it look* like she bailed out other countries, but all she intended to do and did was bail out German banks exposed to bad debt (the TBTF business).

      One way to know who benefits from these interventions is to ask how they are doing now, and what their outlook is.

      Europe is a huge mess if you look below the surface.

      But to your point. They will bail out VW for sure.

    • 0 avatar
      SCE to AUX

      But unlike the Big 3 (or 2, actually) in 2008, VW’s market for its products will likely erode along with its reputation.

  • avatar

    VW would have to cut a lot more than 3k to get anywhere near the industry average; bloated headcount is the reason margins are tight at the VW brand on a good day.

    Of course, good luck cutting anyone in Lower Saxony.

  • avatar

    Because you know, Gunter in Mailroom C-5A-32 Sub-Basement 3 is to blame for all of this.

  • avatar

    So…once again the working stiffs get to pay the price for someone else’s wrongdoing. Pretty revolting.

    Well, at least they have good unemployment benefits in Germany.

  • avatar

    I know I’ve said this before, but the best overall solution to this mess with the least impact to all factors world-wide would be to leave the cars as-is, fine VW stiffly ONCE, donate the money to a charity pool of some sort, and move the heck on.

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