The Volkswagen group is preparing an extensive restructuring of its main brand, which includes a savings plan and a sharp increase in annual revenues of at least 3 billion euros. Faster processes, a revision and simplification of the range would also be envisaged. There is nothing definite but a reduction in employment through retirement and non-replacement of positions could not be excluded. Also because the production of the electric car requires fewer personnel. The plan was revealed thanks to a note from the CEO of the Volkswagen brand, Thomas Schäfer, (as well as sources within the company) first reported by Handelsblatt and then by Reuters. Details should be ready within a few months.
A giant with feet of clay?
“Our brand, despite all its strengths, does not yet rest on a sufficiently solid economic basis,” Schäfer warned in the note. “We must create good and competitive returns in times of crisis and in a continuously unstable world,” wrote the top manager. The brand’s goal is a return on sales of 6.5%, compared to the 3% achieved in the first quarter of this year. Schäfer cited the difficult economic climate, which includes the risk of recession, geopolitical conflicts, unstable supply chains and skyrocketing prices of raw materials and energy, among the obstacles in this historical phase. “The pressure is building. The Volkswagen brand must act,” is the conclusion.
As for the hypothesis that the company acts on the lever of employment (the group has 670,000 employees; the brand 200,000 of which 120,000 in Germany), the head of the powerful works council, Daniela Cavallo, told Handelsblatt that the union will not is willing to accept cuts in wages or jobs, but that it has no decisions to do so.
What will become of the Wolfsburg factory
The leading European automaker is also still evaluating the options to convert its historic factory into its headquarters in Wolfsburg or double the size, building a new one. CFO Arno Antlitz said yesterday during the Reuters Automotive Europe conference that the delay in the launch of the new generation Trinity electric vehicles could push VW to upgrade the plant, avoiding spending more than 2 billion to build another one. Volkswagen already plans to carry out the restyling of the electric ID.3 in Wolfsburg starting this year, as well as a new all-electric SUV model, still on the updated electric platform, called Meb (Modular Electric Drive System) in waiting for the more advanced Meb+, which will guarantee a range of up to 700 km and a maximum recharge power of 150 to 200 kW.
The key to profits: batteries
Another key chapter for the future of the entire German group is PowerCo, the company dedicated to the production of battery cells, which could accelerate the race towards listing. Antlitz stated that a strategic investor could be found as early as 2024. The battery chapter is closely linked to a very important objective for the group led by CEO Oliver Blume, namely the equalization of profit margins between cars with internal combustion engines and electric cars.