UPDATE 3-Volkswagen to cut 30,000 jobs at VW brand by 2020

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By Andreas Cremer and Jan Schwartz
| WOLFSBURG, Germany

WOLFSBURG, Germany Volkswagen (VOWG_p.DE) and its powerful labor unions agreed to cut 30,000 jobs at the core VW brand in exchange for avoiding forced redundancies in Germany until 2025, a compromise which leaves the carmaker’s profitability still lagging rivals.

The turnaround plan announced on Friday will lead to 3.7 billion euros ($3.9 billion) in annual efficiency gains and lift the VW brand’s operating margin to 4 percent by 2020, from an expected 2 percent this year.

That target still remains below rival European carmakers such as Renault (RENA.PA) and Peugeot Citroen (PEUP.PA), which are targeting an operating margin of 6 percent in 2021.

Volkswagen, Europe’s largest automaker is trying to increase savings at its biggest business in its home base of Germany, where its costs are high.

It must also…

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