Audi Replacing VW?

Volkswagen's new boss Martin Winterkorn has come up with a scheme to save the car giant's threatened plant by building a new Audi model there, according to the German magazine Der Spiegel.

This week the company announced the loss of around 4,000 jobs at VW's Forest factory in southwestern Brussels, one of the biggest employers in the Belgian capital, with many believing the move is just a precursor to a total closure.

But according to the German magazine report, to hit news stands Monday, Volkswagen chief executive Winterkorn, who does not formally assume his responsibilities until next year, will meet Belgian Prime Minister Guy Verhofstadt next week to discuss the proposition.

Decision hangs on production costs

"From 2009, a new small Audi, a marque of the group, could be built in Brussels. Winterkorn will meet Prime Minister Guy Verhofstadt this week and ask him whether Belgium is able to work on a solution for the personnel between now and 2009," the weekly magazine reported, without citing any sources.

"The condition for granting the contract to Brussels would always be that Audi pushes for production cost to be competitive," Spiegel added.

"Of course on the face of it this is good news," Manuel Castro, an official with FGTB, general trade federation, told the AFP news agency. "Now we have to get the details, find out how many people we are talking about.

"We remain positive and we are willing to discuss all projects," he said, adding that he had a meeting with the prime minister scheduled for Wednesday.

Union remains skeptical of rumors

A spokesman for the prime minister's office did not confirm or deny the report.

"We are not giving any statement at the moment on the dossier," said Didier Seeuws. "The prime minister has in the coming ten days several contacts scheduled with decision makers and shareholders but we have to wait and see what this can bring".

An official from the Christian union CSC remained skeptical.

"We don't know anything about it," he told AFP. "There has been no information (on the report) between the unions and management. We have to see some confirmation, I am very cautious with these kind of rumors."

The new Audi car, christened the A1, has been a project supported by Winterkorn, formerly the Audi boss, for some time.