VW Plans To Reduce Labor Costs Includes 40 Hour Week and "Pay Tied To Company Results"

FRANKFURT, May 1, 2004; Reuters reported that German car giant Volkswagen wants to link 30 percent of workers' pay to the performance of the business, company human resources head Peter Hartz said in a magazine interview on Saturday.

Hartz was outlining in news magazine Der Spiegel the broad principles of the group's plan to try to cut labour costs.

"The personnel costs must come down by about 30 percent by 2011," Hartz said in the interview released ahead of publication on Monday.

"Today at Volkswagen a part of the bonus is dependant on the performance of the business," he said. "I propose to make up to 30 percent of the wage variable."

"To stay competitive as a high-wage country, we need in Germany to have the most flexible system in the world."

He also signalled an end to Volkswagen's 30-hour week. In future young workers would be allowed to work more than 30 hours. Overtime, he said, should be paid after 40 hours of work.