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Learning English - Words in the News
08 September, 2006 - Published 13:20 GMT
Volkswagen in tough talks
A Volkswagen car
Volkswagen is struggling with high production costs

Difficult negotiations between Europe's biggest carmaker, Volkswagen and the German trade union IG Metall have resumed. The firm wants employees to accept a big increase in working hours without extra pay. But the union wants guarantees that jobs will be protected at Volkswagen's plants in western Germany. This report from Theo Leggett.

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Volkswagen has a serious problem. Although its cars are proving popular and sales are very strong, its profit margins are squeezed by very high production costs, particularly in its west German heartlands.

Earlier this year, its chairman Bernd Pischetsreider introduced a major cost-cutting drive which could ultimately lead to as many as 20,000 jobs being lost. So far, the company says, more than 13,000 employees have taken voluntary redundancy or agreed to retire early. But the company also wants remaining employees to accept an increase in their working week from 29 to 35 hours, without a significant increase in their pay.

Workers' representatives have suggested that they could make concessions, but only if the company promises to build important new models at its German plants, and offers guarantees of job security.

People within the company say the talks in Hannover are unlikely to result in a formal agreement. But they are expected to pave the way for further negotiations which could lead to a deal before the end of the year.

Listen to the words

are proving popular
are liked by a lot of people

its profit margins are squeezed
the amount of money the firm makes is limited

production costs
expenses for manufacturing (making) the cars

a major cost-cutting drive
a big effort to reduce costs

taken voluntary redundancy
chosen to leave their jobs because the firm doesn't want so many staff (usually if you are made redundant or take voluntary redundancy you will be given some money from your firm - a 'pay-off')

make concessions
reduce their demands and agree to some of the plans


guarantees of job security
promises that staff will have stable employment

to pave the way for further negotiations
to be a starting point for more talks

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