Η Volkswagen confirms a large part of the rumours in the German press about an extensive restructuring programme. The programme is called "ACCELERATE FORWARD | Road to 6.5" and, for the time being, only concerns Wolfsburg's main brand. The objective, which was explained to the trade unionists of the employee council at a special meeting, is very clear: "The sustainable achievement of an operating margin of 6.5% in order to secure investments in future technologies and jobs". To this end, the brand will have to improve its profit by around €10 billion by 2026 (last year the operating margin stopped at €2.6 billion).
The measures
The program, which CEO Thomas Schäfer has commissioned Stephan Wöllenstein to implement, includes several measures: streamlining and accelerating administrative processes, also by reducing bureaucratic levels, increasing efficiency in development and production, streamlining the model range and simultaneously reducing the number of equipment versions, improving product quality and sales systems, optimizing the MQB and MEB platforms. As regards the range, Schäfer provided the first concrete figures. Volkswagen intends to focus more on high-volume models. Therefore, cars like the old Arteon will be abandoned. 'We will concentrate on a small number of basic models. This will reduce complexity and generate more profit,' the director added, giving the example of the ID.7, which has 99% fewer configuration options than a Golf 7.
Synergies
Volkswagen also intends to 'optimise the capacity utilisation of the production network in order to increase profitability and to be able to respond more flexibly to fluctuations in demand and the market'. This includes possible synergies with the mass-market brands under Volkswagen's own management: the commercial vehicle segment, Seat, Cupra and Skoda. The Wolfsburg-based company explained that in future "production will be focused even more systematically on multi-brand plants and platforms", this applies to the entry-level electric car with a price tag of around 25,000 euros, which has been awarded to Martorell in Spain, as well as the development and production of the Volkswagen Passat and Skoda Superb. In addition, 'cost optimisation' is envisaged, for example through joint post-sale activities.
Timeline
In the plan, Volkswagen makes no mention of plant closures or workforce reductions. The details should be worked out by mid-September with employee representatives and the plan should be operational by October to be incorporated into a specific agreement with the unions to be shaped in the next planning cycle. Schäfer spoke of goals "very ambitious, but achievable to reach if we join forces. This will enable us to safeguard jobs, to finance our future with our own resources and to continue to invest in new vehicles and technologies, in the modernisation of our plants and in the training of our staff." In short, Volkswagen is to become 'more efficient, faster and more effective'.
Suggestions
As mentioned, the restructuring will need the green light from the trade unions and in particular from the chairman of the workers' council. The embattled Daniela Cavallo, however, has already made the first overtures: "We all agree that we need to achieve savings without reducing collectively agreed wages or losing jobs. Because the decisive levers are different. For example, more cooperation between brands and a greater focus on software and product quality. "I expect a convincing integration of the strategically decisive sectors. We must finally put these central levers in motion continuously in order to exploit the long-term improvement opportunities inherent in our company. In this context, it is also important to keep the workforce well informed and engaged throughout the process," Cavallo concluded.
