VW cuts workers' 2013 bonus due to slumping European car demand

Wed Feb 26, 2014 10:37am EST

* Western German workers to be paid 6,200 euros

* 2013 bonus about 1,000 euros lower than in 2012

* Tougher market conditions caused drop -labor leader

BERLIN, Feb 26 (Reuters) - Volkswagen will pay German workers a lower bonus for 2013 than a year earlier, as slumping demand in core European car markets hurt sales and profit at its major brand.

Deliveries of VW-branded cars, accounting for over 60 percent of last year's record 9.7 million group deliveries, shrank 3.9 percent in western Europe in 2013 to 811,800.

The company disburses 10 percent of operating profit at the passenger-car brand to workers as bonuses. All major German carmakers pay workers bonuses every year.

VW said on Wednesday it will pay its 100,000 workers at its six western German factories a bonus of 6,200 euros ($8,500) each, 1,000 euros less than 2012 and 1,300 less than 2011.

"The tougher market situation has a direct impact on the size of the bonus," VW works council chief Bernd Osterloh said in a statement.

Europe's largest automotive group toned down its outlook for 2014 as uncertainty in European auto markets persists, after reporting record operating profit for 2013 on higher luxury-car sales and falling costs of a manufacturing overhaul.

VW - whose twelve brands include Audi, Porsche and Czech manufacturer Skoda - is due to release a brand-by-brand breakdown of results and executive compensation details on March 13. ($1 = 0.7282 euros) (Reporting by Andreas Cremer; Editing by Louise Ireland)