At Audi, EV Push Comes With a Side of Job Cuts

Like parent Volkswagen, premium auto brand Audi is embarking on an electrified journey and, like VW, it would prefer to see the route paved with profits. A difficult task, given the expense of developing such powertrains and the currently limited public demand for the vehicles they power.

Still, Audi is determined to see it through, hoping that one day, perhaps at the mid-point of the coming decade, it will be able to turn a healthy profit off of EVs in a marketplace that’s more receptive of the technology. To get to that promised land, the company will need to free up cash, and it plans to find that dough in its labor costs.

Expect cuts, the company claims.

On Tuesday, Audi sealed a 10-year labor deal with its employees, ending in 2029. By that date, the automaker hopes to achieve a return of 9 to 11 percent, aided by “socially responsible workforce adjustments” and optimized production capacity.

The $6 billion in efficiencies realized over that time span will be invested mainly into electrification, Audi claims.

“In times of upheaval, we are making Audi more agile and more efficient,” said Audi CEO Bram Schot in a statement. “This will increase productivity and sustainably strengthen the competitiveness of our German plants.”

While the company states that employees are its most valuable asset, adding that the labor deal forbids “terminations for operational reasons,” it does admit that its ranks will thin.

“At the same time, the Works Council and the company’s management have agreed to cut up to 9,500 jobs until 2025,” the automaker states. “This will take place along the demographic curve – in particular through employee turnover and a new, attractive early-retirement program. An equivalent percentage staff reduction will take place in management. Nonetheless, Audi will continue to recruit in the coming years. The company plans to create up to 2,000 new expert positions in areas such as electric mobility and digitalization.”

For these positions, Audi claims it will first consider internal candidates before searching for outsiders with appropriate expertise.

The brand’s first EV, the E-Tron crossover, rolled out of Ingolstadt, Germany earlier this year, with a Sportback model and GT version to follow in 2020. In a bid to future-proof the company, the brand plans to slowly prep its Neckarsulm plant for “electric mobility,” thus ensuring extra capacity in an EV-filled world.

[Image: Audi]