Volkswagen decides to build new SUV in Germany
Volkswagen AG announced Tuesday it would build its new sport-utility vehicle in Germany after the company's labor groups agreed to cut production costs to keep it from being built abroad.
VW management had suggested the new vehicle, the Marrakesh, might be built in Portugal rather than Germany. It has insisted the SUV could only be built at its main Wolfsburg plant at costs below those laid out in existing wage agreements.
Wolfgang Bernhard, the chief executive of the VW brand, said Tuesday he had achieved his aim of reducing production costs by 850 euros ($1,026) per vehicle in talks with employee representatives and the IG Metall labor union.
"For everyone involved, this was not an easy path," Bernhard said. "The main thing is that we can now produce and export the vehicle in Germany under competitive conditions."
Bernd Osterloh, the chief employee representative at the company, said the agreement secured work for more than 1,000 people.