Investing.com - Volkswagen's (ETR:VOWG) management team is due to take pay cuts amounting to up to more than 300 million euros by 2030, German paper Braunschweiger Zeitung reported on Wednesday, citing comments by VW human resources board member Gunnar Kilian.
The carmaking giant's board would opt to slash their salaries by a greater proportion compared to other management or staff members, the paper said. Kilian declined to provide more details.
In December, VW and its unions agreed to bring down the size of the company's workforce by over 35,000 jobs -- or roughly a quarter of total headcount -- by 2030. Capacity at VW's German manufacturing facilities would also be slashed by 734,000 units, although none of its plants would be shuttered.
Still, output at VW's key Wolfsburg plant would be cut to two assembly lines from four, and the future of factories in the German cities of Osnabrueck and Dresden remained uncertain. The firm said it is exploring options for the Dresden site and considering repurposing the Osnabrueck factory.
Unions had called on leadership at VW to agree to pay cuts during the negotiations, saying they were at fault for VW's recent issues. The collective wage agreement halted raises for workers over the next four years and scrapped or decreased some bonuses.
The moves are expected to help reduce expenses over the medium term by 15 billion euros per year, including 1.5 billion in labor costs.
Germany-listed shares in VW have shed more than 20% of their value over the past one-year period, as the group struggles with sluggish demand in Europe and low-cost domestic rivals in China, the world's largest automotive market. The company has previously outlined plans to develop cut-price electric vehicles in a bid to address its Chinese competition, which has grown to even threaten VW's market share in Europe.
Last May, VW warned that European automakers have between two to three years to build up its offerings to compete with their Chinese peers, or risk the survival of the sector.
(Reuters contributed reporting.)