BERLIN - GERMAN auto maker Volkswagen will cut all of its temporary staff, which numbered some 16,500 in 2008, company head Martin Winterkorn said in an interview with Der Spiegel magazine.

Asked how many temporary workers the company will have by the end of the year, Mr Winterkorn said: 'We will no longer employ any of them. It is dreadful for those concerned, but there is no other solution.' He added, however, that permanent employees were not at risk for the time-being.

'No one within the company is thinking about layoffs or those kinds of things for the moment.

'With reduced working hours, we have succeeded in not producing surplus vehicles. And we have a 35-hour work week that we can reduce to 28 hours.

'We can thus limit production and ensure (keeping) permanent personnel. I do not see any problem for this year,' he said.

Volkswagen, Europe's leading auto maker, employs some 330,000 people worldwide.

The company has been hit by the fall in demand caused by the global economic downturn, with sales dropping 15 per cent in January and Volkswagen predicting a 10 per cent decline for 2009.

Volkswagen's finance unit said earlier this month it had received up to two billion euros (S$3.87 billion) in state guarantees for refinancing car loans. -- AFP