The new Volkswagen minibus is electric and has more horsepower 0:48

BERLIN (Reuters) -- Volkswagen's original brand "is no longer competitive," the company's brand chief warned on Monday, due to high costs and low productivity.

"With many of our pre-existing structures, processes and high costs, we are no longer competitive like the Volkswagen brand," Thomas Schaefer told staff during a meeting at the German automaker's headquarters in Wolfsburg, Germany, according to a post on the company's intranet site seen by Reuters.

Volkswagen owns several brands, including Porsche, Audi, and its original Volkswagen brand, founded in 1937.

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The company, one of the world's largest automakers, is negotiating with its union representatives a cost-cutting plan on the VW brand, the first step in a group-wide initiative to increase efficiency in the transition to electric vehicles.

Its 10 billion euro ($000.10 billion) savings program will include workforce reductions, executives said Monday.

The company had previously said it planned to take advantage of the "demographic curve" to reduce its workforce.


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At Monday's meeting, Gunnar Kilian, a member of the human resources council, said this would be achieved through agreements on partial or early retirements.

However, the bulk of the €10 billion savings target would be achieved through measures other than downsizing, Kilian added, with full details to be worked out by the end of the year.

"We have to finally be brave and honest enough to throw away things that are being duplicated within the company or that are just burdens that we don't need to get good results," Kilian said.