Cracks In The Armour? Volkwagen CEO To Address Workers Over Massive Cuts To Come

Volkswagen's CEO will address thousands of workers at its biggest plant on Wednesday as he attempts to win their support for cost cuts at the carmaker's core VW brand.

Europe's largest carmaker keeps boosting sales to new records but profitability gains are not keeping pace with the 12-brand group's rapid expansion.

CEO Martin Winterkorn plans to cut costs by 5 billion euros ($6.7 billion) a year from 2017 as part of efforts to streamline work processes at all levels of VW's namesake brand, its biggest division by sales and deliveries.

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USNA1999 - 7/22/2014 5:51:28 PM

+1 Boost

Good luck cutting costs with the unions, at this pace they will be another GM.

MattDarringer - 7/22/2014 5:55:33 PM

+1 Boost

@USNA1999 Bingo. They already have the overlapping redundant brands. For all intents and purposes their structure should be:

VW entry level cars, trucks, and crossovers (kill Skoda and SEAT)
Audi midrange-->premium
Bentley premium-->bespoke
Lamborghini
Porsche

They also need to do a "One VW" approach

MattDarringer - 7/22/2014 5:51:29 PM

0 Boost

Mistake #1 "Analysts have said the cost-cutting could expose rare differences between management and labor at VW where employee representatives, occupying half of the 20 seats on the carmaker's supervisory board, enjoy considerable influence over corporate decisions."

Labor should NEVER have control over business decisions. A seat on the supervisory board? Good! 50% of the seats? Pure idiocy.

Mistake #2 VW relies too heavily on China, Europe, and Brazil, but refuses to target the USA and India with products that the market wants and will buy.

Mistake #3 VW literally ignores the angry dealer base in the USA and more than a few are toying with getting out. They don't listen to the dealers and in fact are very antagonistic. To VW, its dealers are the enemy.

Mistake #4 If they pursue the merger with Fiat....

GermanNut - 7/23/2014 10:47:36 AM

+2 Boost

I agree the merger with Fiat will be a horrible business decision and would be very surprised if Volkswagen's board were to pursue such an acquisition.