Volkswagen faces job cuts in Germany

The agreement signed last year at car manufacturer Volkswagen, guaranteeing current levels of employment at the company's German plants until 2011 in return for a pay freeze until February 2007, is coming under increasing pressure.

Volkswagen chairman Bernd Pischetsrieder said last month that the future of the plants was at risk if their output was too expensive for the export markets.

Helmut Meine, regional head of the union IG Metall, responded that the agreement should be kept to. He said there could be "no question of closures".

The question is not just theoretical. The company wants to introduce new shift systems at its main Wolfsburg plant, which could result in 1,500 employees being surplus to requirements.