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VW says it can’t rule out job cuts amid plans for electric new start

German car giant Volkswagen said Thursday it is looking for three billion euros in new savings to help fund its pivot towards electric vehicles, adding that it could not rule out job cuts.

Published: 6 December 2018 14:14 CET

VW says it can't rule out job cuts amid plans for electric new start

Photo: DPA

Without more savings, profitability at VW's historic own-brand cars division “will not be enough to be completely ready for the future,” said Arno Antlitz, chief financial officer at the unit, adding “enormous investments” were needed.

The belt-tightening drive comes on top of a programme launched in 2017 that has already found €2.2 billion of savings, the group said.

Added together, the schemes should allow the unit to achieve a profit margin of “at least six percent” by 2022, three years earlier than planned and up from the four to five percent it aims for in 2020.

After admitting in 2015 to manipulating millions of diesel vehicles worldwide to appear less polluting in regulatory tests, Volkswagen hopes to leave its “dieselgate” scandal behind with a massive electrification programme.

SEE ALSO: Volkswagen says next generation of combustion engine cars will be its last

The sprawling 12-brand group said in mid-November it would invest €44 billion by 2023 to speed up the transition away from internal combustion engines — including €11 billion at the core VW brand alone.

Costs have been slashed by reducing the number of variants of each car, increasing productivity at the group's plants and “optimising raw materials costs”.

The group provided no estimates of the impact its new savings drive would have on jobs, but “further cuts to staffing will be inevitable,” a senior manager told business daily Handelsblatt.

“There are opportunities for cuts in administration,” finance chief Antlitz said, on top of the 21,000 job cuts worldwide by 2020 already planned for the VW own-brand division.

Germany's vital car industry has fallen behind on electric cars compared with foreign competitors, only taking the technology more seriously since the 'dieselgate' scandal erupted.

Emissions cheating has so far cost VW €28 billion and sent sales of diesel vehicles plummeting in Germany and further afield.

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Germany or Austria: Where is it easier to get an EU Blue Card?

Though obvious friends with a deeply linked history, Germany and Austria are competing against each other in the global race for skilled workers. Germany needs as many as 400,000 new skilled workers a year to plug its labour market gap. There are over 100,000 vacancies in Austria – a country of just nine million people.

What eligibility rules for an EU Blue Card are there in each country?

In Germany, nationals from countries that need a visa to enter, which includes most non-EU countries, first need to apply for a visa that will allow them to take up gainful employment – which could include a jobseeker’s visa.

After that, they can make an appointment at their local immigration office to obtain an EU Blue Card. If someone is a national of a country that doesn’t need a visa to enter Germany, such as an EU/EFTA state or a handful of non-EU countries like the USA, Canada, Japan and the UK, they can apply for their EU Blue Card after arriving in Germany.

For many EU Blue Card applicants in Germany, they’ll need to have:

A university degree linked to their job
A job offer with a proposed salary of at least €56,400 a year

However, the salary requirement drops to €43,992 annually if the applicant is filling a job in a profession experiencing a particular shortage in Germany. These include doctors, engineers, IT specialists, mathematicians and natural scientists.

A key factor here is whether someone looking to get an EU Blue Card is a national of a country that needs a jobseeker visa to enter Germany in the first place. People from these countries (which includes most non-EU countries) may have a slightly tougher time. That’s because, in addition to fulfilling the requirements of an EU Blue Card, they’ll need to have a few extra things to get the German jobseeker visa. These are:

proof of German language skills (typically B1 level)
proof of ability to pay living costs

Additionally, people older than 45 and coming to Germany for the first time on a work visa need an offer with an annual salary of at least €46,530.

The German city of Munich.

The German city of Munich. Photo by ian kelsall on Unsplash

Another thing to keep in mind is that the German government is currently trying to push through a reform of the immigration laws, which aims to make it easier for skilled workers from abroad to enter the country. As part of this reform, the rules for IT professionals are set to be relaxed so that people with career experience or skills can be accepted for a Blue Card without a university degree.

READ ALSO: What’s in Germany’s new draft law on skilled immigration?

By contrast, as things stand at the moment, Austria’s EU Blue Card salary requirements are slightly easier, even if other factors remain the same. You can also apply for it at an Austrian mission abroad before arriving. You’re eligible for an EU Blue Card in Austria if:

You have a university degree which matches your job OR
If applying to the IT industry, you have three years of relevant experience, as long as you’ve earned those in the last seven years.
A job offer with a proposed gross salary of at least €45,595 a year

So, Austria’s overall annual salary requirement is more than €10,000 lower than Germany’s – unless the applicant is in a skilled profession the German labour market is particularly short of. In that case, their salary requirement for an EU Blue Card in Germany is around €1,500 less than in Austria – but only for those professions.

READ ALSO: How Austria is making it easier for non-EU workers to get residence permits

However, one key factor in Austria is that the company offering the job needs to prove that there are currently no Austrian residents unemployed and registered with the employment agency AMS that could fit that particular position.

According to the Austrian authorities, one of the main requirements is that “the labour market test (Arbeitsmarktprüfung) shows that there is no equally qualified worker registered as a jobseeker with the Public Employment Service (AMS) available for the job.” This could be particularly tricky to prove.

What privileges exist for those are already hold an EU Blue Card?

Other than the obvious right to live and work in the country for at least two years, EU Blue Card holders in Germany are typically eligible for permanent residence much earlier than normal.

While a regular applicant is eligible after at least five years in Germany, EU Blue Card holders can apply for permanent residency after 33 months – or just under three years. Blue Card holders who demonstrate good German language skills – such as by passing a certified language test – can get permanent residence after 21 months, or just under two years in Germany.

EU Blue Card holders in Austria can apply to stay longer than two years with another special card – the Red-White-Red Card Plus. Germany, by contrast, makes permanent residence available quickly. (Photo by Pixabay / Pexels)

After 21 months of working in Austria under an EU Blue Card, you can apply for a Red-White-Red Card Plus. This card gives you unlimited access to the Austrian labour market and the right to stay with similar conditions to those enjoyed by permanent residency holders in Germany. However, it runs out in Austria after a year.

After two years of legal residence in Austria and completion of an integration module, you can get a Red-White-Red Card Plus that’s valid for three years. It takes people five years of residence in Austria to qualify for permanent residency, so a Blue Card and then a Red-White-Red Card Plus can potentially give someone a path to permanent residency in Austria. However, the path requires more bureaucratic steps than in Germany.

The eligibility versus rewards trade-off

Ultimately, an EU Blue Card is a bit harder to get in Germany than in Austria for non-EU skilled workers in most professions, when it comes to the minimum salary requirement being higher. However, Austrian companies need to prove that a candidate offers something no other unemployed person in Austria can offer.

That said, those who do get the EU Blue Card in Germany have an easier, more guaranteed path to permanent residence in Germany, much sooner than in Austria.

We should note though, that both countries have other types of work visas for people who don’t qualify for the EU Blue Card.

READ ALSO: How to apply for Germany’s new ‘opportunity card’ and other visas for job seekers

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