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VW Cuts

Thousands of Jobs Endangered in Brussels

Tuesday was a bad day for Volkswagen employees in Brussels. The German company has suspended production of its compact "Golf" in the European capital and thousands of jobs could be eliminated.

German carmaker Volkswagen announced on Tuesday that it would cease production of its popular "Golf" line in Brussels. Citing what it claimed were cheaper production costs, the company said it would return all assembly of the vehicle in Western Europe to factories in the German cities of Mosel and Wolfsburg. A reorganization is also planned for the Brussels plant, which could put thousands of workers at risk of layoff.

However, the company said it planned to maintain its Brussels facility, which it said would be retooled for other work. In a statement, the company said it was "aware of its responsibility to its employees in Brussels and would draw up an acceptable compensation settlement with the people involved."

The company's management in Brussels said it would begin talks with employee representatives on Tuesday. "We will explore all the business alternatives possible to save as many jobs in Brussels as we can," the statement said. But it is clear that the days of Golf production in Brussels are over. At a company meeting, production chairman Reinhard Jung said that "plans that included Golf assembly in Brussels just didn't add up."

Currently, VW employs 5,600 workers in the European Union capital. Labor unions claim that the company wants to eliminate between 3,500 to 4,000 jobs in Brussels. However, a VW spokesman in Wolfsburg put the number far lower, saying, "We currently believe it will be about 1,500 workers."

On Friday, the assembly lines stopped in Brussels, as workers went on strike to protest the planned cuts. But the news didn't come as much of a surprise: Earlier this month, after announcing personnel cuts in Germany, the company said it would also eliminate jobs in other Western European countries. But the removal of Golf production from Brussels will be a tough pill to swallow in the European capital. The only other VW model produced at the plant is the Polo.

With its factories in Western European operating at less than capacity, the company is reconsolidating production of the Golf in Germany in order to save money. And although the company's overall market share is growing, a weak dollar and tariff conditions in growth markets have dampened VW exports.

The company has identified Russia, India and China as major growth markets of the future. But production for many of those vehicles will take place outside of Europe -- at existing or planned local plants. The company's steady move to the East -- be it Europe or Asia -- is also costing jobs in Germany. The company has already announced plans to shed 20,000 positions.

dsl/reuters/dpa/ap