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The crisis in the European auto manufacturing industry has already cost thousands of temporary agency workers their jobs. And now German carmaker Volkswagen (VW) has indicated that temporary employees in the country could be at risk of losing their work.
VW Chairman Martin Winterkorn admitted in an interview over the weekend that the firm may lay off some temporary staff. Permanent employees will not be affected by the potential job cuts, he said.
“Permanent staff is a topic we surely will hold on to. However, we will have to think about temporary agency workers,” said Mr Winterkorn to the Austrian broadcaster ORF. This comes after VW said, earlier this month, it would cut shifts and lay off 500 contracted workers at one of its US plants due to slowing sales.
But Mr Winterkorn said the firm would not reduce the number of European plants despite the slowdown. “We will not reduce capacities in Europe, but will maintain capacities,” he said. The firm continues to see growth in Russia, South America and the US, but the manager expects the European market to stagnate.
The European auto industry heavily relies on temporary workers, but is losing ground as the European debt crisis continues to haunt the sector. Temporary staff are the first to go when companies experience a slowdown, fuelled by a fall in vehicle sales and production levels. In Europe, the number of passenger car registrations has been on the decline for months, especially in Italy, Spain, France and Germany. Carmakers such as Ford and PSA and Renault have all reported challenging market conditions and layoffs.