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VW warns of job cuts as electric plans accelerate

Reuters

The new Volkswagen I.D. Buggy is displayed at the 89th Geneva International Motor Show in Geneva on March 5.

ReutersWOLFSBURG, Germany (Reuters) — Volkswagen will cut jobs as it speeds up the rollout of less labor-intensive electric cars and will review its sprawling portfolio of brands as it battles to reverse a slide in profit margins, the German carmaker said Tuesday.

The company plans to launch almost 70 new electric models by 2028, aiming to put itself at the forefront of the shift to zero-emissions driving following the 2015 scandal over its cheating of U.S. diesel emissions tests.

However, it said investments to retool factories, as well as adverse currency moves and a sales slowdown triggered by new emissions certification tests, led to a fall in operating margins at its VW, Skoda, Audi and Porsche marques last year.

The margin at its top-selling VW brand slipped to 3.8 percent in 2018 from 4.2 percent in 2017.

“Despite all the rhetoric, the opportunity to reduce an historically high fixed cost base, 2018 actually saw a new high,” Evercore ISI analysts said. “This is unacceptable.”

The group said it would respond by aligning management pay and bonuses more closely with profitability, cutting manufacturing complexity and reducing headcount by an unspecified amount.

Chief Executive Herbert Diess also said it is reviewing its portfolio of brands, which also include Lamborghini, Ducati and Bentley, and whether to divest some noncore businesses.Speech

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