2023-06-14 22:02:59
AIronically, with the VW brand, the Volkswagen Group earns so little that there is not enough money for future investments – although the transformation to electromobility urgently needs to be pushed ahead. The board of directors has now formulated a goal for the reversal: by 2026, VW is to improve its earnings by increasing efficiency by 10 billion euros. The aim is to achieve a sustainable return on sales of 6.5 percent. In 2022 it was 3.6 percent.
“We have to lead the VW brand to new strengths and make it economically robust for the future – we are now starting a great joint effort to do this,” announced VW brand boss Thomas Schäfer in Wolfsburg, where the VW workforce was invited to the works meeting on Wednesday. Around 10,000 employees gathered in Hall 11 and in the outdoor area, where the event was broadcast in the best weather.
“The program has top priority for the entire board,” stressed Schäfer. The goal is ambitious, but achievable if we join forces. VW must speed up administrative processes, increase efficiency in both development and production and still increase product quality. In addition, the model range will be streamlined and the number of equipment variants reduced.
Details on the program called “Accelerate forward road to 6.5” are not yet available. But the acceleration is obviously meant seriously: All measures should be in place by October. It is therefore clear that the implementation will flow directly into the investment planning in November. The central figure for the development and control of the program is Stephan Wöllenstein, whom brand boss Schäfer called “one of the most experienced international VW managers” at the works meeting.
The “Project Management Office” (PMO) headed by Wöllenstein is explicitly to develop the program in close cooperation with the employee representatives. Correspondingly, VW General Works Council President Daniela Cavallo reaffirmed the will to work together – as long as there are no compromises in terms of collective bargaining or job security. The fact that she would otherwise be ready to fight is well known in the group. After former Volkswagen boss Herbert Diess announced that 30,000 jobs would be cut at VW in autumn 2021, the conflict between employees and group management escalated.
Workers’ worries about their future have not entirely disappeared. But there is no longer any talk of downsizing. “The decisive levers are different,” emphasized Cavallo in her speech. She highlighted the topics of group management, cooperation between the brands, focus on software and product quality. “I expect a convincing interlocking of these strategically important fields. We finally have to consistently set these central levers in motion.”
The opportunities that lie in close cooperation between brands have long been known. For example, there has been joint production between VW and Porsche ever since Porsche entered the SUV market with the Cayenne model. The body – like that of the VW Touareg – came from the VW plant in Bratislava right from the start. More recently, the VW Passat and Skoda Superb models have gone a step further, where the cooperation does not extend to production but also to development. According to Volkswagen, this will result in efficiencies of 600 million euros over the lifetime of both models. Next, the brands Seat and Cupra will be responsible for the electric entry-level model planned by VW at a price of around 25,000 euros.
In general, it should be the case in the future that several similar car models from different volume brands will be built in a single plant. You can also see synergies in sales, right up to a joint spare parts business. There is no longer any future for niche models in the volume brand group, explained VW manager Schäfer in Wolfsburg, naming the VW Arteon as an example. “We focus on a few, but on Volkswagen core models. This reduces complexity and brings better results”. The VW management also has high hopes for reducing the number of variants of a car model. With the electric ID.7, customers have 99 percent fewer configuration options compared to a Golf 7, Schäfer pointed out.
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