VW Could Cut 20,000 Jobs in Restructuring

Volkswagen warned that it could cut as many as 20,000 jobs in the next three years under a restructuring plan announced Friday, as Europe’s biggest automaker tries to trim costs at home and improve its small U.S. market share.

“Up to 20,000 direct and indirect employees within the Volkswagen passenger car brand could be affected by this restructuring program,” the company said in a statement after a meeting of its board.

Volkswagen, which employs more than 340,000 workers worldwide, also said it would look at adjusting capacity at its production plants.

The restructuring is not expected to affect the automaker’s U.S. operation, a spokesman said, but could lead to job cuts in Puebla, Mexico, where the company makes Jetta and New Beetle models sold around the globe and employs about 15,000.

Volkswagen was the first import brand to begin manufacturing cars in the U.S., but it closed its Westmoreland, Pa., plant in 1988 after a decade of operation. Today, Volkswagen has about 2,600 U.S. employees at its sales, marketing and credit operations in Michigan and an advanced design studio in Simi Valley.

“We continue to incur significant losses on cars exported from Germany to the USA,” Chief Executive Bernd Pischetsrieder said. “In order to ensure a secure long-term future for the group, we must act rapidly and determinedly to eliminate the problems that we face.”

Said Adam Jonas, a European auto analyst at Morgan Stanley in London, “They need to tighten the belt so they can go out and spend money on products that can gain share in the U.S.” He said Volkswagen had 1.5% of the U.S. market in 2005.