The Board of Management of Volkswagen AG decided on Monday evening to build the compact SUV with AUTO 5000 at the Wolfsburg plant. The decision was preceded by negotiations with the General Works Council and the IG Metall trade union to establish an economically viable basis. At the same time, the Board of Management made a commitment to build a new model at the Emden plant from 2008.

Dr. Wolfgang Bernhard, Chairman of the Board of Management of the Volkswagen brand, said: “We are pleased that, together with the Works Council and IG Metall, we have been able to make the necessary cost reduction of some 850 Euro per vehicle. Finding a solution was not easy for any of those involved. What is important, however, is that we can now produce and export the vehicle from Germany at competitive conditions.”

The compact SUV will be built by AUTO 5000 GmbH. To this end, approximately 1,000 apprentices at Volkswagen AG who will have completed their training in 2006 or 2007 will join the present workforce at AUTO 5000. The apprentices will be hired at AUTO 5000 terms of employment, but are to be given an undertaking from Volkswagen AG to return to employment there in the event of manpower requirements at the company.

Bernd Osterloh, Chairman of the General Works Council, said: “It was important for us to build the compact SUV in Wolfsburg and safeguard jobs for over 1,000 colleagues.”

The collective bargaining partners also agreed to build a further model from the product initiative at the Emden plant under a modified company collective agreement, the terms of which still have to be finalised. This assumes that an economically viable basis for the vehicle can be found. Details will be settled by mid-October.

Furthermore, the management and Works Council also decided to enhance the competitiveness of the Wolfsburg plant further in order to build an additional model in Wolfsburg on this basis. Decisions are still pending.

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