As the auto industry continues its free fall, Volkswagen continues to lie to the citizens of Chattanooga

By Sinclere Lee

Corporations in the United States and Europe on have disclosed plans to lay off more than 70,000 workers as they cope with a severe economic downturn. However, in little old Chattanooga, Volkswagen plans to create 2000 jobs in the already troubled automakers business.

That’s a crack-pipe’s dream! As the auto industry continues its free fall, Volkswagen continues to lie to the citizens of Chattanooga!

Because as part of its plan to bring VW's pretax profit up to $6.5 billion by 2008 (more than quadruple the $1.4 billion earned in 2004), the company has targeted some $2.6 billion in annual labor cost savings. In addition to shrinking the workforce and lengthening the workweek, his plan also calls for paying lower wages to new hires.

So far, 9,700 VW employees have agreed to an early retirement package and another 2,500 have accepted a voluntary severance package. VW, who is eager to book the 20,000 job cuts by the end of 2006, is now offering workers an "early booking bonus" of $69,000 for agreeing to depart by Sept. 30.

Blue-chip U.S. companies Pfizer and Caterpillar announced the largest cuts, while European heavyweights ING and Philips also unveiled plans to slash thousands of jobs.

Outright layoffs are by no means the only moves companies are making to cut costs. A study by consulting firm Challenger, Gray & Christmas found almost half of employers had avoided cutting staff through measures including salary freezes and cutting back workers' hours. Does this sound like somebody getting to hire? No!

"While layoffs are usually the most visible action, and usually the most painful, companies are finding a multitude of ways by which to cut costs," said John Challenger, chief executive of the Chicago-based company.

Volkswagen said Tuesday that it planned to end production of the best-selling Golf compact car at its Brussels factory, resulting in a loss of about 13,500 jobs in a country rapidly losing blue-collar jobs, as the company tries to cut costs and raise profit.

Volkswagen, the largest carmaker in Europe, aims to keep 1,500 workers at the plant, enough to build the Polo car, said a spokesman, Hartwig von Sass. He added that the discussions with the local union were still under way and that no final decision had been made. The Golf will be made at two plants in Germany, in Mosel and Wolfsburg.

The company plans reduce its work force in Germany by 20,000 people, mainly through early retirement and voluntary departures, to cut production costs. The carmaker's factories are not running at full capacity and exports, especially to the United States, are suffering from the strength of the euro against the dollar, the company said Tuesday.

1. Drugmaker Pfizer Inc, which is acquiring rival Wyeth, plans to cut 15 percent of the companies' combined 130,000 workers -- about 19,500 jobs.

2. Caterpillar Inc, the world's largest maker of heavy equipment, plans to lay off 17,000 workers and buy out 2,500 others to cut costs.

3. U.S. mobile phone service provider Sprint Nextel Corp plans to reduce staff by 8,000, or 14 percent of its work force.

4. Home Depot Inc, the world's largest home improvement retailer, said it would eliminate 7,000 jobs, or 2 percent of its work force, as it closes its Expo home design unit.

5. Amsterdam-based banking and insurance group ING said it plans to cut 7,000 jobs to save $1.3 billion (1 billion euros) in 2009.

6. Dutch conglomerate Philips Electronics will cut 6,000 jobs after reporting its first loss since 2003.

7. Corus, Europe's No. 2 steelmaker, said it would cut 3,500 jobs worldwide, 8 percent of its work force.

8 Spanish steel producer Acerinox said it might temporarily lay off workers at its Spanish factory, which employs 2,500 people, if demand does not improve.

9 General Motors Corp plans to lay off 2,000 workers at two assembly plants in Michigan and Ohio and temporarily idle another nine North American assembly plants in response to weak demand.

Volkswagen got the city of Chattanooga the laughing stoke of the free market system around the world by stringing them along with the scheme that they will bring jobs to town, but it won’t be confirmed until only after the March 3, city election. How big a sucker can you get?

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