A production hall in the VW plant Salzgitter
The VW plant in Salzgitter is currently building a pilot plant for the production of its own battery cells.
SalzgitterIn Hall 3, crankshafts were manufactured last year on an area of 20,000 square meters. But now it has to be for the new one Age of electromobility Place to be created: In the production hall of the VolkswagenEngine plant in Salzgitter, Lower Saxony, the pilot plant for the production of its own battery cells will be set up.
A few hundred meters away, craftsmen work on building a production line for stators and rotors, the most important components of an electric motor. This year the production should begin.
“We are slowly increasing the number of units,” said Thorsten Jablonski, who works in the supply division of the VolkswagenGroup is responsible for transmission and the electric drive.
Jablonski has to make sure that the planned start of production actually works. At the end of the year VW starts with his Model offensive in electric cars, At the latest, the new electric motors must be produced.
Current club events
Tuesday, 29.01.19, 19:00 Hamburg: Literaturhaus Hamburg: Philosophical Café with Philipp Blom
Friday, 01.02.19, 18:00 Berlin: Meet the Ambassador – France
Tuesday, 05.02.19, 08:30 Cologne: The non-profit organization
Tuesday, 05.02.19, 12:30 Berlin: Curry & Politics
Thursday, 07.02.19, 18:30 Hamburg: Club talk with Angela Titzrath
Thursday, 24.01.19 Berlin: AI Masters
Not only the engine plant in Salzgitter, but the entire group-owned subcontracting division of Volkswagen will prepare for the start of the electric age. By 2023 alone, the German component plants alone will have to deliver around 800,000 electric drives a year for the Group’s new all-battery-powered vehicles. In addition, there are another 600,000 from a Chinese part of VW.
Thomas Schmall
The CEO of the new group unit “Component” aims for an operating return of six percent for his division.
Parallel to the change to the electric drive, the entire group-owned parts and subcontracting division of Volkswagen also gets a new organization: the so-called “component” has been managed as an independent unit since 1 January.
Around 80,000 employees in 61 plants worldwide and an annual turnover of around 22 billion euros have been brought together under one roof. So far, every single brand has its own component factories. The focus in the VW Group is on engine and transmission factories.
This supplier area is a special feature
“By combining the components area, we want to shape the transformation into the future,” said Stefan Sommer, responsible for purchasing and components at Salzgitter on Friday.
The collaboration, which has now begun, ensures synergies across the brand boundaries and strengthens the competitiveness of the entire Group. Volkswagen saves money that can be used to build up electrical production.
For example, in the past, only the Volkswagen brand was responsible for the major engine and transmission systems in Salzgitter and Kassel. These brand limits are now being lifted, so the big part is the new “component”AudiEngine plant in Györ, Hungary.
In addition to engines and transmissions, the new division produces steering systems, chassis and car seats. The strong subcontracting sector is a special feature of the Volkswagen Group. In the other German automakers, the components play a much smaller role.BMW For example, it does not have its own gearboxes and only makes motors itself.
Study on electromobility: Around 20,000 euros in the luxury class – So is the financial advantage of electric cars
Volkswagen does not go as far as some of its competitors in terms of outsourcing its component range. The supply division gets no legal independence such as that General Motors with his daughter daughter Delphi and Ford with Visteon had done. Nor is there in Wolfsburg plans for an IPO of the Zulßtochter. In addition, the “component” will continue to supply only its own group. “We will not enter the direct bidding competition with suppliers from other car manufacturers,” Sommer emphasized.
VW wants to save money by job cuts
Nevertheless, Volkswagen is exerting similar pressure on its own subsidiary as external suppliers: the “component” is expected to achieve significant productivity gains in the coming years. The division must permanently generate two billion euros in earnings improvement by 2025 annually. In the past two years, the parts factories had reduced their costs by around 750 million euros.
Thomas Schmall, CEO of the new group unit “Component”, announced that his division will achieve an operating return of six percent in the coming years – and thus the Group average. “That’s very demanding,” said Schmall, “but that’s not the end point either.”
The new Group unit aims to achieve a large part of the savings through job cuts, which will be further accelerated by the switch to electric drives. Schmall said Volkswagen’s parts business will cut ten percent of its jobs by 2023.
As is customary in the VW Group, this should also be socially acceptable for the “component”, ie without redundancies. Volkswagen wants to take advantage of the comparatively high average age of the workforce. Employees should be offered early retirement packages and partial retirement. Following the same pattern, the VW parts factories had already canceled 1,900 jobs in the past two years.
Development Alliance: The BMW-Daimler-Plan for autonomous driving
The production of electric motors will be much easier for all car manufacturers in the future and thus less personnel-intensive. “The added value of an electric motor does not even reach 50 percent of a combustion unit,” divisional head Jablonski admitted. Electric motors are also smaller with the same power, it is much less material needed.
The downsizing due to the change to the electric drive will accelerate significantly in the coming years for all manufacturers. The Stuttgart-based Fraunhofer Institute for Industrial Engineering (IAO) has calculated in a new study that in Europe by 2030 about 90,000 jobs can be eliminated. 29,000 people work today in the engine and transmission factories of the Volkswagen brand. “Taking the Fraunhofer study as a basis, about 11,000 jobs would be threatened only at the mark,” it says in company circles of VW.
Switching to the electric drive is not the only major change for Volkswagen’s component factories. The consequences of the diesel scandal have also become noticeable in engine factories such as in Salzgitter: customers today order a diesel less often, so production must be adjusted accordingly.
Outsourcing the “component” is the right way
Before the number of registrations plummeted, the Salzgitter site produced around 5,000 diesel engines a day. The total daily capacity is 7000 engines. “Today we have arrived at 3000 diesel engines”, explained plant manager Christian Bleiel. Entire production lines for diesel engines have been abandoned in Salzgitter.
In investor circles and analysts, the spin-off of the “component” is seen as an important step in the right direction. However, Volkswagen does not go far enough with this reorganization. “We do not see enough progress towards more efficiency,” complains Arndt Ellinghorst of investment firm Evercore ISI. Other manufacturers acted significantly more cost-conscious.
Theme: Volkswagen
Other car manufacturers have responded to investor requests, for example in Italy. TheFiat-ChryslerGroup had long decided to split off its supply area. Fiat had initially thought about an IPO of its supplier division Magneti Marelli. It did not come to that, because Fiat sold the daughter completely and without the stock exchange for a good six billion euros to an investor – to the Japanese Calsonic Kansei, the US investment company KKR belongs.
In the case of Volkswagen, something like this should be ruled out in the long run. The mighty works council alone ensures that it is in line with the VW owner families Porsche and Piech lies. Complete sales of group subsidiaries – whether via the stock exchange or directly to investor groups – are as good as unimaginable in Wolfsburg until today.