The carmaker Volkswagen wants to get its low-profit core brand VW Passenger Cars back on track with a new savings and efficiency program. "We see that our brand – despite all its strengths – is not yet economically solid enough," said brand boss Thomas Schäfer in an internal letter to employees on Wednesday, which is available to the German Press Agency. "But we also have to create good, competitive returns in times of crisis and in a world that is volatile in the long term," Schäfer said. The "Handelsblatt" had previously reported on the letter.
Schäfer wants to start with production, among other things. "We don't align our plants with brands, but with platforms. This then determines which models are produced there. Not the other way around," he announced. This alone will bring billions of euros in savings in the coming years in the so-called brand group volume, which also includes Skoda, Seat and the small VW commercial vehicles.
In the first quarter, the core brand of the Wolfsburg-based car company had only achieved a return on sales of 3 percent – out of 100 euros in sales, only 3 euros remained in day-to-day business. "This means that we simply cannot afford important investments in the future," said Schäfer. "In order to be truly crisis-proof, we need a sustainable return on sales of 6.5 percent." That's why VW is now launching a program for more efficiency and cost savings.
The "Handelsblatt" reported that Volkswagen was aiming for an improvement in earnings of at least 3 billion euros per year. The program is explicitly not about job cuts, the paper reported from business circles. Rather, partial retirement should also be used and positions should not be filled. A spokesperson for the company declined to comment on the report. Schäfer said in the internal letter to the workforce that it was still too early to give details. Together with the works council, employees are to be informed about concrete steps.
On the employee side, works council chairman Daniela Cavallo made it clear that she expects participation. "We have taken note of the corresponding goals of the brand board, and we now need to hold talks about them," she said in a statement. Profitability and job security are equally important and common goals. "Collective bargaining cuts or cuts in our job security cannot be made with us," she added.