UPDATE 2-VW confident on growth if economy dips -Labour rep

Thu Aug 18, 2011 10:31am EDT

* Works council head sees no slackening of demand for cars

* Strong order books keeping factory utilisation rate high

* 2,200 temporary workers to get permanent contracts

(Adds Osterloh comment on UAW, Suzuki)

HAMBURG, Aug 18 (Reuters) - German carmaker Volkswagen (VOWG_p.DE) expects to maintain strong growth in the face of an economic slowdown, the head of the company's works council said.

There are no signs of a slackening in the demand for cars this year, Bernd Osterloh, who represents labour on Volkswagen's supervisory board, told the Hamburg business journalists' club late on Wednesday, in remarks embargoed for release on Thursday.

Volkswagen is "very robust" and has order books that will keep its factories working at high capacity for months, Osterloh said.

"VW is doing well at the moment," he said, adding that the company was likely to grow faster than expected.

The company's fast growth is manageable, even as it integrates sportscar maker Porsche (PSHG_p.DE) and truck maker MAN into its operations, said Osterloh.

Volkswagen set a fresh sales record in July, with deliveries up 17 percent thanks to growth in key markets China, North America and Eastern Europe.

Deliveries for the January to July period were up 12.5 percent from the same period last year.

Osterloh said job cuts would not be on the agenda, even if the debt crisis prompts an economic cooling in Europe and North America that cannot be offset by strong growth in Asia.

"We are able to react to a decline in volumes in the double-digit percentages without any consequences for employees," Osterloh said, adding that the company's factories in its largest market, China, were operating at more than 100 percent of capacity.

Volkswagen plans to offer permanent contracts to 2,200 of its total 9,000 temporary workers this year, he said. VW's main plant in Wolfsburg employs nearly half the company's temporary workers.

AUTO WORKERS

Turning to the United States, Osterloh said he was keen to see organised labour representation at VW's plant in Chatanooga, Tennessee, but said he would not actively promote efforts by the United Auto Workers labour union to broaden its membership there.

It was up to the employees themselves to decide which union should represent them, Osterloh said.

The UAW, which has been facing declining membership, aims to strengthen its presence at the factories of foreign-owned car companies, including Volkswagen.

Osterloh said he did not expect an end to Volkswagen's partnership with Suzuki Motor Corp , adding that reports of teething problems between the two companies in recent weeks had been overplayed.

"The process is just taking somewhat longer than we imagined it would," Osterloh said. (Reporting by Jan Schwartz, writing by Jonathan Gould; Editing by Will Waterman and Hans-Juergen Peters)

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