* CEO tells staff that massive savings needed
* Works council chief plays down risk of job cuts
* All planned investments to be put under review
By Andreas Cremer and Jurik Iser
WOLFSBURG, Germany, Oct 6 New Volkswagen
Chief Executive Matthias Mueller warned staff on
Tuesday to brace for "massive cutbacks" in response to the
diesel emissions scandal that has hammered the company's stock
Speaking to employees at VW headquarters in Wolfsburg,
Mueller, who replaced longtime CEO Martin Winterkorn late last
month, said all the company's investment plans would be put
under review and an existing cost-cutting programme accelerated,
cautioning, "this will not be painless".
It was the first admission that the emissions crisis, which
has sent tremors through the broader auto industry, could lead
to significant job cuts at the company, which employs close to
60,000 at its main factory, roughly 10 percent of its global
"We need to make massive cutbacks in order to manage the
consequences of the crisis," Mueller told more than 20,000
workers at the staff gathering, according to a statement
released by Volkswagen.
"Technical solutions to the problems are within view.
However, the business and financial consequences are not yet
clear," he said, adding that VW would review all of its
"What is not urgently needed will be scrapped or delayed,"
Mueller said. "And therefore we will adjust our efficiency
programme. I will be very open: this won't be painless."
Workers at the meeting wore t-shirts emblazoned with the
slogan "One team - one family" and held up banners declaring "We
Earlier, Bernd Osterloh, the influential head of VW's works
council, said the scandal would impact earnings at the core
autos division as well as bonus payments to workers.
But he played down the impact on jobs, saying there were no
immediate plans to cut staff and stressing that workers would
not "foot the bill for the wrongdoings of a group of managers".
VW employs roughly 60,000 people at its main factory.
Mueller said the company's more important task was to
restore trust after it admitted that 11 million vehicles were
affected by the rigging of diesel emissions tests. But he noted
that thoroughness was more important than speed in clearing up
The company has an Oct. 7 deadline to present a plan to
Germany's KBA regulator to bring diesel emissions into line with
A letter sent to German lawmakers and seen by Reuters on
Tuesday said that 8 million diesel vehicles in the European
Union were fitted with software capable of cheating vehicle
Mueller said for some of the vehicles it would be sufficient
to have software refitted, while others may need additional work
on the hardware.
Sources close to Volkswagen's board had told Reuters last
week that it was considering cost cuts as well as measures to
boost cash flow in order to prop up its credit rating.
(Reporting by Andreas Cremer; Additional reporting by Jan
Schwartz; Writing by Caroline Copley; Editing by Noah Barkin)