The fallout from Volkswagen's emissions scandal has not ceased. In fact, it just keeps on going. Since the backlash is going to cost the company tens of billions of dollars, unprecedented belt-tightening is needed to ensure that all the fines and recalls will be sufficiently covered.
One of the ways the company plans to do this is by freezing any and all promotions from managers all over the world, The Verge reported. This measure is across the board and nobody from managerial positions and above should be expecting salary raises.
There are other ways the company will cut back on expenses. For example, one of VW's bestselling automobiles is the Golf. Its next iteration, the Mk 8, will simply reuse many components found in the current model. This is expected to stave off hundreds of milllions in R&D expenses, Reuters noted.
Workers associations have chimed in as well. According to Works council chief Bernd Osterloh, the idea that managerial raises will be halted should be rejected as it is "merely symbolic" and is at the expense of workers.
He also says that VW should lead by example first. "What will the performance-bonus systems be in future at Volkswagen?" He added, "we want to be part of the decision-making on this." "It is about ... being able to counter a corporate culture directed at just one goal: cost cuts at any price!"
When asked about job cuts, he says that, "We are driving in thick fog at the moment." Manager Magazin noted that the Volkswagen brand is to bear the brunt of the budget cuts and high-end brands like Porsche and Audi are mostly protected from the measures.
For instance, Audi will keep on hiring until 2018. Business Standard quoted Audi personnel chief Tomas Sigi, "We are sticking with plans for strategic growth and are continuing to hire new employees as planned."
Since the costs associated with the fallout is now expected at 30 billion Euros, more measures to reach this mark can be expected from the company in the future.
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