Volkswagen has warned its workforce to expect sweeping job cuts as it tries to cover the costs of its multi-billion pound fall-out from the diesel emissions scandal which severly damaged company's brand image.
The German car manufacturer’s new chief executive, Matthias Müller, told thousands of staff at the company’s Wolfsburg headquarters that the fall-out of the scandal would force changes and said “I will be very open. This won’t be painless”.
In the meeting he admitted that the financial consequences “are not yet clear” and as a result he was putting “all planned investments under review”.
Müller admitted that the £4.8bn available “won’t be enough” to deal with the scandal which has wiped £22.4bn off the company’s value and warned that the company “must prepare for significant penalties”.
Head of VW’s works council, Bernd Osterloh, echoed Müller’s words during the mass meeting saying that the company had to “call into question with great resolve everything that is not economical”.
The 11 million diesel vehicles fitted with software designed to cheat emissions tests, 8 million of which are in Europe, has resulted in the biggest crisis in VW’s 78-year history and caused previous chief executive Martin Winterkorn to resign.
Since the news of the wrongdoing broke VW has admitted that nearly 1.2 million diesels in the UK have been fitted with the software, including vehicles manufactured by other VW-owned companies, including Audi, Seat and Skoda.