Volkswagen Cuts 400 Jobs in South Africa

The economic instability seems to be a never ending pool of stories, whether they are good or bad. But, mostly, bad. As is the news for 400 South African Volkswagen workers, who will soon join thousand of other people gathering outside unemployment offices.

The German builder has come to this decision in light of poor home market and export demands. Last year, 92,000 vehicles produced in South Africa were exported. The company stated it would stop production in the last week of February and will lay off 400 people somewhere around April, on a voluntary basis.

Volkswagen tried to brighten the news by reenforcing its commitment to South Africa. Recent economic developments would not alter its plans to invest in technology in the following years and to make more car parts in the country.

Analysts say the domestic vehicle market will register a 10 percent drop in 2009, following international markets' trend. Globally, Volkswagen's vehicle sales fell by 15 percent. No news as what severage packages for the 400 workers will be, but it is to be assumed no one will jump to the idea of losing their job.

Established in 1946, Volkswagen of South Africa is subsidiary of Volkswagen Aktiengessellschaft and the largest German investor in South Africa. Volkswagen of South Africa is located in Uitenhage, some 35 km away from Port Elizabeth in the Eastern Cape. The company is also one of the largest foreign employer in the country, the human resources scheme comprising of 6,000 people.