OFFER ENDS TOMORROW:
Save 45% on a subscription.

Audi cuts 150 million euros a year from labor costs

New deal will use workers more flexibly

Ingolstadt. A new agreement, known as Audi Future, will yield annual savings of 150 million euros starting in 2006, said Horst Neumann, the Audi board member in charge of human resources.

Neumann said 136 million euros in annual savings will result from lower payroll costs. The remaining 14 million euros will come from decreased overheads.

Audi and its industrial council reached the deal in early April. It runs through 2011 and is designed to cut wage and salary costs by 2.8 percent as of January 1, 2006.

The agreement opens the door to even further savings by making it possible to use workers more flexibly and to operate factories at a higher capacity.

The deal does not cover the question of where future Audi models will be assembled.

Audi Chairman Martin Winterkorn recently announced that the new, 450-horsepower R9 sports car will be built at the Neckarsulm plant.

Unions were happy with the decision because production of the A2 will be discontinued at the end of July.

But Audi could still decide to build the R9 elsewhere as it is not part of the Audi Future agreement.

"We don't want to tie ourselves down over a seven-year period," Neumann said.

Only 85 units of the A2 are currently being built a day at Neckarsulm.

The model's sales have been far below expectations. The A2's total production run, beginning with its launch in January 2000 and ending this July, is expected to reach 175,000 units.

Due to low plant utilization, about 100 A2 assembly workers have been lent out, initially for a year, to Mercedes' Rastatt plant, to work on the A class.

Union representatives hope that these employees can be brought back to Neckarsulm to work on the R9.

Automobilwoche has learned that Audi has decided to go ahead with the A5 Coupe and Cabrio (based on the A4), but hasn't chosen an assembly plant yet.

0

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters