FRANKFURT -- Volkswagen AG warned its German employees of "dramatic" job cuts should employees reject management's plans to reduce labor costs considerably, VW's personnel chief said on Tuesday.
"If we don't push through our cost (cutting) concept, then the volume of employees in Germany will shrink dramatically in the coming years," Peter Hartz told German daily Frankfurter Allgemeine Zeitung in an interview to be published on Wednesday.
VW finance chief Hans Dieter Poetsch in early September made a veiled threat that more than 30,000 jobs were at risk if the company failed to slash costs by 30 percent, or 2 billion euros ($2.56 billion), by 2011.
In the interview, Hartz declined to put a number on the potential job losses, saying "number games don't do justice to the seriousness of the situation."
The VW manager, the main architect of Germany's controversial labor market reforms, also added that if Volkswagen's German work force were to vote on a full-blown strike for the first time in the company's history, it would be "very expensive" for the carmaker.
"After a few days, the company would grind to a halt," Hartz said.
He said the group was aiming to build the upcoming VW compact off-road vehicle in Wolfsburg, Germany, a move that would secure 3,000 jobs alone.
This, however, would require concessions from workers since costs for such a model currently are 1,800 euros more per vehicle than if production were farmed out elsewhere.
Although he conceded that VW was suffering from overcapacity, he reiterated that plant closings were "not an issue."
"We have a chance to solve this problem with new investments, should they then be affordable," he explained.
NOT WITHOUT A SCRATCH
Both Hartz and VW Chief Executive Bernd Pischetsrieder declined to comment further during an event in Wolfsburg on Tuesday.
Responding to Hartz's comments, though, deputy works council chairman Bernd Osterloh said: "If (German engineering union) IG Metall doesn't escape without a scratch, then he won't escape without one either."
Nevertheless Osterloh, who has been designated to replace works council chair Klaus Volkert in 2006, said he expects the two sides to reach an agreement in the ongoing wage dispute.
The two will meet for the fifth round of talks on Thursday, with the threat of warning strikes looming if no deal were made.
Volkswagen, which will also report third-quarter results on Thursday, wants the 103,000 workers at its six western German factories to accept a two-year long wage freeze.
IG Metall, which is calling for extensive job guarantees, lowered its initial demand for a wage hike of 4 percent, but Volkswagen rejected the deal.