INGOLSTADT, Germany -- Audi AG is launching a tough cost-cutting drive aimed at slicing annual personnel costs by as much as $26 million.
Audi's managers and the union representing Audi workers are negotiating a labor contract to replace the agreement that expires at year end.
One major issue is hours. To adjust to changing market demands, employee work schedules can be adjusted during the course of a year. But Audi personnel boss Horst Neumann wants more flexibility; he wants the freedom to adjust work schedules throughout the life cycle of a product, which can be as long as seven years.
Neumann said he also believes there are potential savings in production labor.
Because of Audi's global growth - the number of employees worldwide rose to 50,000 from 30,000 in the past 10 years - several departments are either overstaffed or understaffed.
Neumann said he wants until 2006 to examine Audi's structure and reshuffle jobs if necessary. He said layoffs in Germany are not being considered, but, "companywide there are 19,000 jobs that are under scrutiny.
"We will retain the same number of staff in Germany," he added, "but we will not increase it."
Another issue is whether overtime and Saturday work should be reduced or even abolished.
For Xaver Meier, head of Audi's employee union, the priority is to ensure continued use of German production sites.
He said he fears that the full capacities of the Ingolstadt and Neckarsulm plants might not be used for the successors to models manufactured in Germany.
For example, Audi's parent company, the Volkswagen group, has decided to build the Audi Q7 SUV at the VW plant in Bratislava, Slovakia.
Audi production boss Jochen Heizmann said the small Q5 SUV and the A9 sports car also will be manufactured at VW plants. "Portugal, Mexico and Belgium are all possibilities," Heizmann said. He added that the decision will be made next year.