VW speeds up transformation – jobs at risk

At the same time, VW is rolling out an earnings improvement program aimed at achieving a sustained contribution of EUR 5.9 billion from 2023. Measures include reducing complexity and optimising material costs. “We will significantly step up the pace of our transformation so as to make Volkswagen fit for the electric and digital era. Volkswagen is to become more efficient and agile and a more attractive and modern employer, especially in administration. Initial constructive talks with the Works Council on the planned implementation of the digitalization roadmap in the administrative areas of the company have already taken place,” says Ralf Brandstätter, Chief Operating Officer of the Volkswagen, in a press release. The current year will be a key year for the transformation of the brand. Investments in future topics totaling EUR 19 billion will be ramped up through 2023. That is EUR 8 billion more than originally planned for the period 2019 - 2023. The aim is to undertake these investments using the brand’s own resources and to mitigate the rising costs of more stringent CO2 and exhaust regulations. That requires a sustained improvement in earnings. To that end, Volkswagen is reducing material costs and the number of variants. Furthermore, productivity at plants is to increase by five% per year. Nonstaff overheads and personnel requirements in administration are to be cut by 15% each. The focus is increasingly moving towards the digital transformation. The company estimates that the automation of routine tasks will result in the loss of between 5’000 and 7’000 jobs by 2023. The company says that these numbers can be absorbed by not recruiting replacements for employees who leave the company for retirement reasons. At the same time VW says that it will create some 2’000 new jobs in its Technical Development, which relates to electronics architecture and software.