German car maker Volkswagen said that it will not renew the contracts of all its 16,500 temporary workers. Mr Martin Winterkorn head of VW said that all temporary staff would be gone by the end of 2009. He described it as dreadful situation, but said there was no other solution. He added that "No one within the company is thinking about lay-offs or those kinds of things for the moment. With reduced working hours, we have succeeded in not producing surplus vehicles. And we have a 35 hour work week that we can reduce to 28 hours." Mr Winterkorn said that permanent employees were not at risk for the time being. He added that "We can thus limit production and ensure [keeping] permanent personnel. I do not see any problem for this year." It may be noted that Volkswagen has been hit by the fall in demand caused by the global economic downturn. A sale dropped by 15% YoY in January 2009 and VW predicts a 10% decline this year.
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