Volkswagen to shed 600 temporary jobs to tackle scandal costs

BERLIN (Reuters) - Volkswagen will shed about 600 temporary workers at a factory in Zwickau, Germany next year as it battles to cope with the fallout from its cheating of diesel emissions tests, labour representatives at the carmaker said.

Europe's largest automaker is cutting spending on factories, equipment and models to curb multi-billion-euro costs from a scandal centring on up to 11 million diesel vehicles that contain software capable of deceiving regulators about the true level of their toxic emissions.

The Zwickau plant, the fifth largest of VW's 10 Germany-based factories where 8,800 staff assemble the Golf and Passat models, will face idling because of a mandatory holiday in 2016 and plans by management to cut the Phaeton saloon, whose body shell is also built at the site, to only an electric version.

"We must now adapt to a new situation in which job protection will become more important again than the creation of further employment," Jens Rothe, head of the works council at Volkswagen Sachsen GmbH said on Tuesday.

The jobs of more than 10,000 core workers at VW's three eastern German sites in Zwickau, Chemnitz and Dresden are protected by the carmaker's production plans, while another 160 temporary workers will be moved into open-ended employment, the works council said.

VW didn't return calls seeking comment.

Wolfsburg-based VW plans to cut 1 billion euros ($1.10 billion) from its 2016 investment plan and cease unprofitable models such as the Eos convertible and Skoda's Roomster van as it is pushing a new company structure and greater emphasis on electric technology.

($1 = 0.9127 euros)

(Reporting by Andreas Cremer; editing by David Stamp and Maria Sheahan)