Volkswagen Restructuring Saves €1 Billion | Money
Volkswagen Streamlines Management, Cuts costs at Core Brands
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Wolfsburg – Volkswagen is cutting back at key decision-making levels. The company is restructuring its mass-market brands – reducing the number of board members in favor of faster processes and clearer responsibilities. The overhaul is primarily intended to save money, with Volkswagen aiming to cut around one billion euros in production costs by 2030, the automaker announced Wednesday.
Volkswagen Consolidates Power Within Mass-Market Brands
At the heart of the plan is a new leadership structure. The central areas of Production, Technical Development, and Purchasing will be combined into a joint, cross-brand Group Brand Board. The goal is to consolidate decisions and avoid duplication of effort. Industry publication Automobilwoche first reported on the changes.
the reorganization will result in a notable reduction in board positions. The total number of board members within the brand group will decrease by approximately one-third, according to the company.
Only Four Board Members Per Brand
Specifically, the individual brands Škoda, Seat/Cupra, and the Volkswagen Commercial Vehicles division will each be led by only four regular board members going forward.This marks a departure from Volkswagen’s previously larger leadership teams.
Volkswagen Passenger Cars CEO thomas Schäfer (55), who also leads the entire mass-market group, is promoting the new model.”The new Group Brand Board will bring more speed and control in the sense of cross-brand optimization,” Schäfer said. The new governance model will begin this january and is expected to be fully implemented by summer.
Volkswagen’s Cost-Cutting Program Continues
The restructuring is part of a larger cost-cutting initiative. Europe’s largest automaker had already initiated a extensive savings program at its core VW brand, wich has struggled with profitability.
As part of CEO Oliver Blume’s efforts, Volkswagen plans to eliminate a total of 35,000 jobs in germany by 2030, the company has stated.