Volkswagen to Cut 1,400 Jobs at Diesel-Engine Unit

September 23, 2016, 10:29 PM UTC
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Picture taken on June 28, 2012 shows a man working on a diesel motor at a plant of German car maker Volkswagen in Salzgitter, central Germany. German auto giant Volkswagen faced fast-spreading worldwide investigations and a potentially huge financial hit on September 22, 2015 as a scandal mounted over diesel cars it programmed to secretly thwart US pollution tests. AFP PHOTO / DPA / JULIAN STRATENSCHULTE +++ GERMANY OUT (Photo credit should read JULIAN STRATENSCHULTE/AFP/Getty Images)
Photograph by Julian Stratenschulte — AFP/Getty Images

Germany’s MAN SE plans to cut 1,400 jobs at its diesel-engine operations, aiming to increase savings by more than 450 million euros ($500 million).

The restructuring plan includes streamlining internal processes, cutting costs in development, distribution and other areas and promoting strategy and portfolio development, it said on Friday. Volkswagen (VLKPF) owns a majority stake in MAN SE.

Orders for new turbo engines may stay at current low levels for years to come, Chief Executive Uwe Lauber said, citing external factors which he did not specify.

“For this reason, we need to prepare ourselves and increase our flexibility and efficiency even further,” the CEO said.

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MAN’s core truckmaking business last year announced 1,800 job cuts as part of a broader reshuffle of production in Europe, spurred by parent Volkswagen’s goal to align heavy-truck brands MAN and Scania more closely.

Augsburg-based MAN Diesel & Turbo said it wants a site in Hamburg to focus on service and after-sales, and facilities in Oberhausen and Bengaluru to handle production of steam turbines. A plant in Berlin will in future make components for turbomachinery, it said.

Fortune added additional detail to this report.