* VW has thousands of baby boomers due to retire in years
* Management, labour haggle over structural issues -sources
* Osterloh to brief staff on talks at Oct. 20 meeting
(Adds Osterloh remarks, VW no comment, analyst comment, detail
BERLIN, Oct 12 Volkswagen's works
council chief said the company could cut up to 25,000 staff over
the next decade as older workers retire to help the carmaker
achieve cost-cuts needed to revive the VW brand.
The German group's top executives have been in talks with
works council leaders representing VW staff since June in an
attempt to agree cost savings to fund the carmaker's
post-dieselgate shift to electric vehicles.
Volkswagen is under pressure to make cuts at high-cost
operations in Germany to fund this transformation, while still
grappling with billions in costs for its emissions scandal.
Waiting for staff to retire is a more attractive option for
VW workers than actual layoffs.
"We have the huge benefit of the baby boomer age groups," VW
labour boss Bernd Osterloh told Handelsblatt on Wednesday in
remarks confirmed by the works council. "That's why we can also
say the jobs of VW workers are safe."
Volkswagen has said tens of thousands of staff from the
1950s and 1960s baby boomer generation will come up for
retirement in coming years. VW declined to comment on Osterloh's
25,000 target, which would represent about a fifth of the
company's workforce in Germany.
Analysts said the cost savings from staff cuts of up to
25,000 would be a solid start, but must be accompanied by a
reduction in purchasing costs and R&D spending to ensure a
turnaround of the carmaker's operations.
"VW has no choice but to bring down costs massively if it
wants to put its business on a sound footing," Evercore ISI
analyst Arndt Ellinghorst said. VW must achieve cost savings of
about 22 billion euros ($24.64 billion) globally in coming
years, three quarters of which must be invested in its
transformation, said Ellinghorst, who has a "buy" recommendation
on the stock.
Ellinghorst also said VW could reap up to 2.5 billion euros
by moving workers into early retirement, a "massive" gain for
the VW brand which may only make operating profit of about 2
billion euros in 2016 after 2.1 billion in 2015.
There appears to be common ground on opting for retirement
to cut staff, two sources at VW familiar with the talks said on
Wednesday, but VW management and the workers were at odds over
Management wants to trim back white-collar staff which
account for about two thirds of Wolfsburg's 60,000 jobs
including administration, R&D, sales and marketing, one of the
But workers are angry about management attempts to outsource
services such as plant security, IT support and catering at a
division in Wolfsburg, they said. Workers also oppose moves to
scrap a longstanding practice of allowing foremen to switch to
higher-paid non-production jobs, the sources said.
VW declined to comment.
Osterloh, seeking to raise pressure on management, has
invited workers and executives to a special staff conference on
Oct. 20 in Wolfsburg to brief the rank and file on the talks,
which are due to be concluded in November.
($1 = 0.8928 euros)
(Reporting by Andreas Cremer; Editing by Kenneth Maxwell and