VW to slash employee bonuses by 50%

German newspaper reports indicate that Europe's number one carmaker, Volkswagen AG, plans to cut its annual bonus by 50% for about 3,500 senior executives.

This comes as a result of the decline in the company's 2003 profits.

It said a decision will be made by the end of February or early March.

Bonus cuts for other employees are also expected. Bonuses are normally paid in May.

The company manufactures models such as Golf and Passat, as well as luxury cars Audi, Lamborghini and Bentley.

VW operates plants in Africa, the Americas, the Asia/Pacific region and Europe, and holds a 34% stake in Swedish truck maker Scania.