VW weighs cutting 15,000 staff on plant closures, brokerage says

Volkswagen Group could force through decisions on plant closures this year, paving the way for more than 15,000 job cuts, according to analysts at Jefferies.

The automaker could shutter production facilities without needing approval from the supervisory board, leading to possible provisions of as much as €4 billion ($4.4 billion) in the fourth quarter, Jefferies said, citing comments from VW executives.

The board has in the past blocked management's restructuring efforts.

"Unions should feel pressure to reach new agreements while VW will be in position to force layoffs," the analysts said.

"There is risk of plant disruption, but unions can only strike on pay, not plant closure or layoffs if the latter are not contractually protected," Jefferies said in a note that cited comments VW made during a roadshow in North America.

A VW spokesperson declined to comment.

VW said earlier this month that it is considering shutting plants in Germany for the first time in its history, part of a cost-cutting plan as it struggles to compete with Asian rivals.

"The rationale to re-size VW's namesake (brand) is not new but management's sense of urgency and determination to tackle excess capacity and spending patterns both are," Jefferies analysts said.

"Three days on the road in North America with management gave us conviction that there is no plan B that would rule out capacity reduction," they said.

As part of its restructuring push, VW last week terminated a long-standing job security scheme for six of its German plants, clashing with powerful unions that have pledged fierce resistance against any kind of cuts.

Jefferies said charges could be around €2.5 billion to €3.0 billion euros and up to €4 billion assuming separation costs of two annual salaries per worker and "including other closure costs" it did not specify.

Reuters contributed to this report