Volkswagen seeks to steer clear of job cuts

WOLFSBURG, Germany (Reuters) - Volkswagen VOWG.DE, Europe's biggest carmaker, raised hopes the 90,000 workers in its high-wage western German plants could extend their job guarantees a further three years until 2014, a senior executive told Reuters.

“We aim to secure employment in the long term,” Personnel Director Horst Neumann said in an interview.

The company’s supervisory board is set to discuss its strategy and set a rolling budget for the upcoming years on Friday at its traditional November planning session.

“Investments will be discussed which reach beyond 2011 so factually we will decide about a lot of job security,” Neumann said.

Volkswagen, Daimler DAIGn.DE, BMW BMWG.DE and other European carmakers have granted their staff job guarantees for several years -- usually in exchange for a pay freeze, longer hours, more flexible working agreements or other concessions.

VW’s senior labor leader Bernd Osterloh said: “We want job guarantees to be extended until 2014.”

Volkswagen wants to be able to keep its staff level high primarily by continuing to outgrow the car market. The company was one of the main beneficiaries of the German car scrappage scheme, which boosted sales particularly of smaller models.

It now hopes for markets to rebound and to attract buyers for its abundant new models.

“We have to secure the jobs through our car manufacturing business,” Neumann said, adding: “Car parts are an important factor as well.”

Volkswagen’s goal of boosting productivity 10 percent requires it to find more work for its staff in order to avoid cutting a tenth of its workforce every year. One method has been to expand further along its manufacturing chain by building out its components assembly operations over the last couple of years.

The carmaker has also searched for new business opportunities, including a recent project to produce engines for home use as miniature power-stations.

“We are looking at new growth opportunities -- but it will always be in a way where we will supply our know-how,” Neumann said.

Reporting by Arno Schuetze; Editing by Jon Loades-Carter