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VW says German costs down to industry average

From Reuters| March 12,2007

Hourly wage costs at Volkswagen Germany have fallen to the German industry average but are likely to remain under pressure, Volkswagen's personnel chief said in a newspaper interview published today.

"Wage costs in Germany are around the industry average but wage costs of course are only part of improved competitiveness," Horst Neumann told the Frankfurter Allgemeine Sonntagszeitung newspaper in an interview.

He said the hourly wage in VW's six traditional western German factories is now $56.56 (43 euros) per hour.

"That is an appropriate position compared with the German industry: cheaper than Audi, BMW and Mercedes, and somewhat higher than at Ford and Opel," Neumann said.

Workers at VW's six western German plants used to be the highest paid in the industry but the company has been lengthening working hours and is slashing about 20,000 jobs, or 20 percent of the workforce, there to boost efficiency and profit.

Neumann said wage competition would remain fierce despite the reduction in hourly costs.

"It wouldn't work even with 30 euros. We'd have to get down to 10 euros like in Hungary. In Poland and the Czech Republic, hourly costs are only 7 to 8 euros.

"There is no question that pressure on wages in Germany will remain," he said.

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