Unions Say They Don’t Trust VW Leadership in Diesel Crisis

Volkswagen AG is trying to use its self-inflicted diesel cheating scandal to justify deep cuts in the company's hourly workforce and even possible plant closures, its unions claim.

Bernd Osterloh, who heads VW’s works council and sits on the company’s supervisory board, declares in a bluntly worded letter co-authored with other union leaders that the VW brand’s management board “lacks reliability.” The letter says VW brand chief Herbert Diess is trying to use the crisis to push job cuts that “wouldn’t have been on the agenda a few months ago.”

Last autumn VW set aside €6.7 billion ($7.6 billion) to cover the expense of fixing some 11 million diesels it rigged to evade emission rules. But analysts say repair costs, fines and legal settlements in the U.S. alone are likely to total several times that amount.

VW Chairman Hans Dieter Poetsch has described the situation as an “existence-threatening crisis.” He warns employees they can expect deep and prolonged budget cuts.

Osterloh suggests VW leaders focus their budgetary actions on management inefficiencies. He has estimated VW could save €2 billion by streamlining its model lineup and streamlining logistics.

The union letter calls for management assurances about job retention in Germany. Union views carry considerable clout at VW. The company’s workers control half the seats on the company’s supervisory board. They also wield considerable political influence in Lower Saxony, the German state that holds two additional board seats.