Germany: VW plant cuts shift, financial arm freezes hiring

  • AP, Berlin
  • Updated: Oct 01, 2015 10:43 IST
A power plant of the Volkswagen factory in the city Wolfsburg, Germany. A Volkswagen factory in Salzgitter decided to cut one shift a week, a sign of the impact made by the emissions-cheating scandal. (AP Photo)

A Volkswagen engine factory in Germany said, on Wednesday, it had dropped one shift a week and the company’s financial services division imposed a temporary hiring freeze as the world’s largest automaker grapples with an emissions-rigging scandal.

The extent of the fallout from the scandal, which erupted on September 18 when the US Environmental Protection Agency said Volkswagen had cheated on tests of its diesel cars, remains unclear as do the costs to the auto giant.

Longtime CEO Martin Winterkorn quit last week but said he was aware of no wrongdoing on his part.

Stella Pechmann, a spokesperson for the engine plant in the city of Salzgitter, confirmed a report confirmed on Wednesday in the Wolfsburger Allgemeine Zeitung daily that a “special shift” is being cut as a precaution because of the current situation. The shift had previously been added to deal with high demand.

Separately, the Volkswagen Financial Services division is freezing new hiring until the end of the year, though spokesperson Stefan Voges told news agency DPA that existing hiring agreements are unaffected.

The scandal has raised concerns that the reputation of German automakers and engineering as a whole could be tarnished, though finance minister Wolfgang Schaeuble said he doesn’t see the affair damaging Germany as a business location.

In the United States, a spokesperson for Illinois attorney general Lisa Madigan said late on Wednesday that a subpoena for information had been issued to Volkswagen as part of an investigation into the emissions-cheating, although details of the request were not disclosed.

More than two dozen US states launched a probe into the carmaker, separate from an investigation by the federal government in Washington.

“We will emerge from this crisis stronger, too. We learn from crises,” he was quoted as saying in an interview with the RedaktionsNetzwerk Deutschland group of newspapers.

However, “in the end, VW will no longer be what it was -- a lot will change there structurally”.

Matthias Mueller, previously the CEO of the Porsche sports car unit, was appointed to succeed Winterkorn on Friday.

In turn, Porsche appointed Oliver Blume -- responsible for production and logistics at the division since 2013 -- as its new chief executive on Wednesday.

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