VW Plans Short-Time Work for About 80,000 German Employees

(Bloomberg) --

Volkswagen AG plans short-time working for about 80,000 employees in Germany after the coronavirus pandemic forced the carmaker to idle its sprawling European factory network.

Businesses large and small face a disruption that “goes far beyond” the level of the financial crisis of 2008-2009, Lower Saxony economy minister and VW supervisory board member Bernd Althusmann said in a speech Tuesday in Hanover.

The situation poses an unprecedented challenge in the history of the German state, he said. The world’s largest automaker has its global headquarters in Lower Saxony and is by far the largest employer in the region.

The industrial giant, which employs about 670,000 people worldwide across the group, last week announced it will stop production in Europe. Factories in other regions including South America have also halted operations since then, while VW’s operations in its largest market China are gradually ramping up output again after the shutdown.

Under German short-time working rules the state pays part of the reduced salaries for workers. The program was key after the financial crisis to resume operations swiftly when markets bounced back. Althusmann expects the economic fallout from the coronavirus outbreak will be felt for a long time.

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