Employment

Only successful companies can create jobs. That means that Volkswagen’s competitiveness lies at the root of safeguarding jobs. The Volkswagen Group is well aware of this challenge. All our working processes throughout the Group are being scrutinised as part of the ForMotion Plus Programme. In 2006, the Board of Management and the General Works Council of Volkswagen AG signed an internal agreement on the “Volkswagen Way”. The objectives are to improve corporate processes, to enhance productivity and to tap synergies more effectively. Key factors in this context are the introduction of innovative working-time models and the return to the five-day week with no direct wage compensation.

Profit sharing
To partly offset the lack of wage compensation, the collective wage agreement for Volkswagen AG plants in Germany concluded in October 2006 includes a new profit sharing model for the workforce. In future, the amounts distributed to employees may be substantially greater than in previous years depending on reported profit. Elements of performance-related pay and profit sharing are also included in the collective wage agreement for the Auto 5000 GmbH. Every employee at the company receives a share of profits and – as part of an individual performance bonus – anything between 60 percent and 140 percent of a predetermined figure. Among other things, the individual bonus depends on the quality of work and the employee’s versatility and efficiency.

Severance pay and phased early retirement
Personnel adjustment measures such as those required as a result of the restructuring activities at Volkswagen AG in 2006 are taken on the basis of the mutual agreement of both parties. All employees covered by the collective wage agreement had the option of leaving the company on the basis of termination agreements. Prior to the employees affected making such decisions, Volkswagen ensured they were involved in extensive discussions and given numerous offers of support and advice about starting a new career. As well as offering severance payments, we extended the opportunities to participate in the phased early retirement scheme to include those born between 1952 and 1954. In addition, we had increased the length of this part-time scheme to up to seven years at the end of 2005.

Human resources ‘clearing house’ counteracts excess capacity
A newly developed tool for human resource deployment and safeguarding jobs allows the Group to deploy its workforce with considerable flexibility. It works rather like a human resources clearing house and allows excess capacities and human resource shortfalls in different business areas to be balanced out. Similar functions are performed by AutoVision GmbH, which is involved in a number of activities to keep project work within the Group and safeguard employment.

Enhancing productivity
The Volkswagen Group is also committed to significantly enhancing productivity at its international locations. New Audi models are now to be produced for instance at the Brussels plant. The associated reduction in labour cost as a result of increasing the working week to 38 hours met with the broad approval of the workforce. In autumn 2005, restructuring campaigns were already launched at Shanghai-Volkswagen, SEAT (2006-2009) and the locations in Brazil (2006). The programmes aim to ensure competitive labour costs, higher capacity utilisation and secure jobs.

Transparent information policy
Where significant changes in company operations are unavoidable, employee representative bodies are involved at an early stage. This is ensured not least by the presence of employees on the Supervisory Board. The relevant information is distributed to the employees concerned via the relevant bodies, such as the Global Group Works Council. Corporate Communications support this process.