German Chancellor Merkel rules out informal talks with Brexit talks

With the debate on “Brexit” heating up, German Chancellor Angela Merkel commented that there would not be any informal negotiations with the United Kingdom before any formal declaration of intention to leave the European Union.

Merkel stated that she was willing to accommodate more time for the U.K. if the nation needed more time to file the Article 50 needed to trigger a member state’s EU exit.

Source: Bloomberg

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Volkswagen plans on merging its components business and mulls asset sale

According to sources, German carmaker Volkswagen AG plans to combine the components business of its brands and divest certain assets as part of its strategy to navigate itself out of the emissions crisis.

The company’s senior management outlined its plans to the board, and may disclose it to investors by Thursday.

According to sources, the company plans to merge the components units of each brand into one new entity that would include about 70,000 employees at more than two dozen locations worldwide, allowing it to save costs and boost efficiency from a single management.

Currently, there were no plans outlined by VW to spin off or sell the new VW components unit.

VW is also likely to announce plans for a portfolio review, which could lead to the sale of non-core assets. While no decisions have been made on which assets are part of the sale, ones that could end on that list include motorcycle brand Ducati, the MAN Diesel & Turbo business and propulsion specialist MAN Renk.

An initial public offering of the trucking business could also be considered in future.

Source: Bloomberg

Volkswagen strikes wage deal with union; to outline new strategy in mid-June

German car-maker Volkswagen AG reached a wage agreement with the labor unions in Germany which represented around 120,000 of its workers, in line with union agreements in the region.

The company would increase worker pay by a total of 4.8%, which would be staggered in two phases, coming close to the union’s demand for a pay rise of around 5%. The wage pact is valid for 20 months.

The agreement with unions comes on the back of last week’s worker’s strike at VW’s plants in Wolfsburg, Kassel, Braunschweig and Salzgitter after the car maker failed to make a wage offer.

As per the new agreement, workers would receive a 2.8% wage hike in September 2016, followed by another 2% rise in August 2017, and concessions on profit-sharing and pensions, including partial early retirement.

Separately, Volkswagen’s Chief Executive Matthias Mueller plans to announce a new strategy in mid-June 2016 for its core autos business that it hopes would boost its profitability by 2025 once it emerges from the emissions scandal.

Source: WSJ & Reuters

Bosch sets aside €650m for Volkswagen related risks

Robert Bosch GmbH stated on Wednesday that it would put aside €650m ($735m) for legal risks for FY 2015, after it emerged that the company had supplied Volkswagen AG with software used to cheat on emissions tests.

The news comes in the wake of Volkswagen disclosing plans to buy back about 480,000 vehicles in an attempt to limit damage caused by the emissions scandal.

Bosch had provided two components used in Volkswagen’s vehicles.

Source: WSJ