Volkswagen Group Works Meeting addresses importance of realignment

At Volkswagen’s main plant in Wolfsburg more than 15,000 employees attended Works meeting that was addressed by CEO, Dr. Martin Winkerkorn. The main topic of discussion was realignment on the ecological, managerial and structural front. Winterkorn began with the changes the Volkswagen Group would be making at its end.

He stressed on the importance of change while showcasing the company’s dynamic growth and at various levels. He added, opting for comprehensive alignment in management and structural front was essential to move forward to face new challenges. At Group level two changes were made.

First was implementation of a New Board of management Function for China, headed by Dr. Jochem Heizmann and second change was appointment of Leif Ostling to take care of Group Board of management. Highlighting the company’s ecological restructuring, Winterkorn also emphasized on world markets and their uncertainties in economic growth.

Volkswagen Group has invested in excess of 62.4 billion Euros for its ambitious plans for the future, some of which the company hopes to achieve by 2016. The German automobile company has also invested 14 billion Euros in China as part of their expansion plans.

Auto News Release

Realignment of Volkswagen Group is topic at works meeting

Prof. Dr. Martin Winterkorn: “Reorganization is the right response to the increasing challenges

Some 15,000 employees attended works meeting at main plant in Wolfsburg

Wolfsburg, 12 June 2012 – The extensive structural, management and ecological realignment of the Volkswagen Group were the main topics at today’s works meeting at the Wolfsburg plant. Addressing the workforce, CEO Prof. Dr. Martin Winterkorn said: “This is the right response to the increasing challenges and also lays the foundations for keeping the Group and its brands on their successful course even in a difficult market environment.” At the meeting attended by some 15,000 employees, Winterkorn also expressed his satisfaction with the outcome of the negotiations on the company collective agreement: “I think this is a very reasonable collective agreement. Its terms allow the team their well-deserved participation in the company’s success. At the same time, it does not go too far, but makes sure we can maintain competitive labor costs.”

Winterkorn began by enlarging on the comprehensive structural and management alignment. “In total”, Winterkorn said, “we are making 31 changes in the Group and at the brands.” He explained that the Group’s dynamic growth at all levels made these changes necessary: “Volkswagen has become much larger, more international and, of course, somewhat more complex. This extensive realignment is the right response to the increasing challenges.”

There are two main changes at Group level: The new Board of Management function for “China” led by Prof. Dr. Jochem Heizmann reflects the significance of this market for the Group. In this context, Winterkorn emphasized that it is planned to increase production capacity in the People’s Republic of China to about four million units by 2018.

The second main change is the appointment of Leif Östling, President and Chief Executive Officer of Scania until August 31, to take charge of the Group Board of Management “Commercial Vehicles” function. Winterkorn said this paves the way for the MAN, Scania and Volkswagen Commercial Vehicles brands to leverage synergies and jointly harness growth potential. “MAN, Scania and Volkswagen will have equal rights in the cooperation and stand on an equal footing. The Volkswagen Commercial Vehicles brand will also retain its independence with its own management team that has the ranking of a board of management, its own administration and development as well as its own production and sales”, Winterkorn emphasized.

Given the growing economic uncertainty on world markets, Winterkorn also commended the recently-concluded collective agreement: “The terms of the agreement allow the team their well-deserved participation in the company’s success and also guarantee the creation of 175 additional apprenticeships as well as permanent employment contracts for up to 3,000 temporary personnel. At the same time, the collective agreement does not go too far, but makes sure we can maintain competitive labor costs.” He went on to say: “The bottom line is that Volkswagen continues to maintain the balance between decent pay, competitiveness and secure jobs. I believe we can all be very satisfied with that.”

Winterkorn also took the opportunity offered by the works meeting to highlight the Group’s ecological restructuring: “Our aim is not merely to make Volkswagen the world’s largest automaker, but more importantly to become the world’s most sustainable automaker as well. That is why we are vigorously committed to our target of reducing emissions by our European new vehicle fleet to below 120 grams by 2015.” He commented that this involved an enormous technological and financial effort. “To do that, every new vehicle generation will be ten to 15 percent more efficient, our efficiency technologies will be installed as standard in all new models with the help of our modular transverse toolkit (MQB), and we will be stepping on the gas when it comes to hybrid and electric vehicles”, Winterkorn said, adding that well over two-thirds of the Group’s €62.4 billion investment planned for the period to 2016 – plus a further €14 billion earmarked for China – would be spent on ever more efficient vehicles, powertrains and technologies as well as “environmentally compatible production at our plants”.