The carmaker Volkswagen intends to massively trim its core VW brand for returns over the next three years. The volume brand is expected to increase operating profit by ten billion euros by 2026, primarily through greater efficiency and savings, and thus achieve a return of 6.5 percent. In 2022, VW managed 3.6 percent.
Among other things, the production of VW is to be more closely interlinked with the sister brands Skoda and Seat. “We are starting a major, joint effort to lead the VW brand to new strengths and to position it robustly for the future,” announced brand boss Thomas Schäfer (53) on Wednesday at the works meeting in Wolfsburg. The 6.5 percent are “achievable with combined forces”. Head of the General Works Council, Daniela Cavallo (48), emphasized that the savings should be achieved without cutting back on standard wages or job security.
The new return targets for the core brand are part of a general overhaul of the corporate strategy that CEO Oliver Blume (55) plans to present at an investor conference on June 21. He would like to get more out of Europe’s largest car company through closer cooperation between the group brands. According to an insider, the VW supervisory board will talk about cost-cutting measures of up to five billion euros next Tuesday. CFO Arno Antlitz (53) wrote down after the works meeting Twitter, the savings at VW are the prerequisite for the planned electric car entry-level model, which in Spain be built and should not cost more than 25,000 euros.
The planned jump in profits should help VW to finance necessary investments and secure jobs despite a difficult environment. Schäfer wants to streamline administrative processes, better utilize production capacity, streamline the model range and reduce equipment variants: “We focus on a few, but on Volkswagen core models. That reduces complexity and brings more results”. Niche models like the VW Arteon should not have successors. VW is already offering 99 percent fewer variants for the ID.7 electric car than for the comparable Golf 7 combustion engine model.
Loss of wages and layoffs are taboo for Cavallo
The plants of VW, Skoda and Seat/Cupra should work more efficiently by producing for several brands at the same time and thus be able to react more flexibly to fluctuations in demand. Comparable models such as the VW Passat and the Skoda Superb are to be developed and built together. This alone would save 600 million euros, the statement said.
Cavallo explained that securing employment is just as important as profitability. Loss of wages and layoffs are taboo. “Because the decisive levers are different.” The top employee representative calls for “convincing interlocking of the strategically crucial fields of group management, cooperation between brands, focus on software and product quality”. The milestones of the program should be in place by October and cast in an agreement with the works council.
Activists call for “construction of trams”
Several activists blocked the main entrance to the Volkswagen plant in Wolfsburg on Wednesday. A traffic sign above VW Nordstrasse was covered with a banner on Wednesday that read “Build more trams,” pictures showed. Police officers tried to persuade the activists to break down the blockade, a police spokesman said at noon. “The production and supply of the main plant are currently not affected by the campaign.” Traffic to the plant will be diverted, Volkswagen said.
Among other things, the demonstrators hung themselves over the access roads with the help of taut ropes. They asked Volkswagen employees to stop working, at least for a short time. “Let’s talk to each other about real, social and ecological restructuring and fight together for a good life for everyone,” they said. Among other things, they are calling for Volkswagen to be converted into a traffic turnaround company in which “products such as buses and trains roll off the assembly line”.