Volkswagen Under Siege - Cancelling All Non Essential Programs

Volkswagen Group CEO Matthias Mueller said the automaker will delay or cancel non-essential projects as pressure mounts to slash spending in the wake of the diesel-emissions scandal.

"We will review all planned investments, and what isn’t absolutely vital will be canceled or delayed," Mueller told some 20,000 employees at the company's headquarters in Wolfsburg, Germany, today. "And that's why we will re-adjust our efficiency program. I will be completely clear: this won't be painless."

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TheSteve - 10/6/2015 12:40:49 PM

+3 Boost

On one hand, cancelling all non-essential programs, non-essential travel, etc. makes sense when you can see the writing on the wall: Huge costs to correct your massive snafu, potential huge fines and legal costs defending yourself from consumer and government legal action, huge settlements, and to top it off, the likely double-whammy of reduced sales, revenue, and profit. Ouch. Big ouch! :-(

On the other hand, this looks eerily similar to a company I once worked for before their implosion. Stay on the lookout for big layoffs at VW and other "restructuring."

I'm hoping the best for VW/Audi Group (VAG). You f*cked up, big time. I hope you make it out of this mess, and come out as a better company.

Vette71 - 10/6/2015 2:55:07 PM

+1 Boost

Restructuring in Europe, especially Germany is a bitch. You cannot do layoffs like the USA. VW's case is worse in that the local state government owns 20% of the company and the unions hold an equal number seats on the board as do the shareholders. The push will be on to cut projects outside of Germany ala North America, exactly where they need to be investing more to secure their future. This could be a long term death spiral as they withdraw into their local market.

Vette71 - 10/6/2015 2:58:14 PM

+1 Boost

One other factor is there is a law in Germany that says the local state government, Lower Saxony, has final say in any sale of VW. Shows you how focused they will be on protecting Wolfsburg. Exactly the wrong thing to do for the business.

mre30 - 10/6/2015 3:19:03 PM

+2 Boost

Maybe this will result in VW putting a bullet through the new Bugatti Veyron replacement and maybe they will spare themselves some embarrassment at a looming failure by pre-emptively canceling the ghastly Bentley Bentayga Luxo-SUV.

TomM - 10/6/2015 3:50:17 PM

+1 Boost

The money has already been spent on the Bentayga - it has been developed - and it would result in a huge write off if they did not produce it - and it would sell every one they decide to produce and could be priced twice that of the Tesla X and still sell out.I would not expect them to cancel this. However - I would suspect advertising budgets for product will take a big hit (The will need customer relations ads instead) as well as a cut down/out of racing programs. I do not know how far the Bugatti has progressed so know if it could be ended as well - remember laws in Europe and especially Germany make it very hard to close a factory.

But because they are publically owned - you will likely see a way to solve their problems emerge.