The Volkswagen model has achieved an necessary milestone within the “Accelerate Forward/ Road to 6.5” world efficiency program, with administration and worker representatives reaching settlement on key factors to streamline the corporate, following intensive negotiations. The goal of the three-year program is to safe the Volkswagen Group’s core model competitiveness, guarantee it’s future-proof and sustainable in the long run. The Volkswagen model goals to make a constructive earnings contribution totaling ten billion euros by 2026, additionally to offset adverse results reminiscent of inflation and better uncooked materials prices. The working return on gross sales is anticipated to enhance sustainably to six.5 % in 2026. The Volkswagen model initiatives that this system will ship constructive earnings contributions of as much as 4 billion euros as early as 2024. To obtain this, the Company concentrates on performance-enhancing and cost-saving measures in this system’s three focus areas: optimizing materials and product prices, decreasing mounted and manufacturing prices and growing revenues. The Company and the worker representatives have additionally reached settlement on workers discount measures to chop personnel and labor prices. These measures will apply all through Volkswagen AG. As such, from January 2024 the Company will prolong its partial retirement schemes to all workers born in 1967 (and for severely handicapped workers born in 1968), to scale back administrative workers prices particularly. The present hiring freeze and entry freeze to the Tarif Plus wage group will proceed till additional discover.
Thomas Schäfer, CEO of the Volkswagen Passenger Cars model and Group Board Member answerable for the Core model group, stated: “With its current and future car models, the Volkswagen brand is on track with executing on tis strategy. We will now strengthen our economic foundation to support our success in years to come. This will boost our efforts to make VW the world’s leading volume brand. In recent weeks we’ve made good progress in detailing the most comprehensive program the brand has ever launched. The precise contributions for all the action areas have been defined,the measures have been agreed and are already being implemented. Our efforts will in part start to bear fruit as early as 2024. This is crucial if we are to withstand the increasingly tough competition in extremely challenging market conditions. The agreement with the employee representatives is key to be able to rapidly advance on our chosen path. It is testament to how much commitment, solidarity and innovation are embedded in the VW brand and presentin our teams.”
Group Chief Human Resources Officer Gunnar Kilian: “With the agreement on the key measures we are taking a decisive step to move Volkswagen back to a leadership position. This requires not only structural but also personnel reduction measures. As a leading employer, it goes without saying that our actions will be socially responsible. In addition to the company’s hiring freeze and stabilization of higher pay grades in the Tarif Plus bracket, which will continue, weagreed with the employee representatives to extend our partial retirement option to all employees born in 1967, thereby reducing the workforce as much as possible along the demographic curve, especially in the administrative units of Volkswagen AG. We will also selectively offer termination agreements at all levels, if necessary. The agreement reached will give us the required flexibility from 2024 to safeguard profitability andlong-term job security.”
General Works Council Chairwoman Daniela Cavallo stated: “We expect 2024 to be a very challenging year, especially for our volume brands. In defining the key points for the performance program, we have now created the basis for ambitious improvements at the right time. The path we have embarked on together will make us more competitive long term without this impacting unilaterally on our workforce. Reducing collectively agreed wages or impacting agreed job security was no option for us. The billion-euro improvements we are now targeting show quite clearly which impactful tools are available to our core brand to unlock further efficiency gains within our strong Group network. We emphatically welcome the fact that we will systematically and consistently offer the attractive partial retirement scheme in the future. However, we will continue to ensure that processes, structures and tasks actually become easier andfaster, because these efforts must not increase employees’ workload. We will also closely monitor the further refinement of the targets for the core brand and its divisions in the coming months.”
Performance program focuses on efficiency enhancements and price financial savings
The “Accelerate Forward/ Road to 6.5” program is being carried out in all areas and in any respect ranges of Volkswagen. Measures which have already been adopted and are presently being carried out embody the next:
- Development occasions for brand new Volkswagen fashions might be lower from 50 to 36 months in order that autos are delivered to market quicker with out sacrificing high quality or security. This will save a couple of billion euros over the interval coated by the planning spherical by means of 2028.
- The variety of check autos in Technical Development might be decreased by as much as 50 % as digitalization and technological advances allow extra testing to be carried out on check rigs. This might save round 400 million euros per 12 months with out compromising high quality.
Other measures embody improved procurement providers, which is able to allow annual financial savings of over 320 million euros to be generated, enhanced after-sales enterprise, which is able to generate greater than 250 million euros per 12 months, and the optimization of manufacturing time alongside the agreed web site pacts, which is able to save over 200 million euros every year. All of those measures might be carried out as early as 2024.
Socially acceptable job cuts
Volkswagen AG’s efficiency program can also be specializing in selective administrative job cuts with the aim of sustainably bettering value buildings and safeguarding jobs in Germany on the similar time. The demographic curve – which is able to see child boomers retiring within the subsequent few years – can even be leveraged to the utmost with partial retirement being supplied to workers born in 1967 (1968 for severely handicapped individuals). Workforce discount measures which can be already getting used such because the hiring freeze and the stabilization of Tarif Plus might be continued.
Volkswagen AG goals to scale back its administrative workers prices particularly by 20 %. The Company can even provide selective termination agreements in any respect ranges if crucial. There isn’t any normal termination-agreement program. Open positions sooner or later won’t be crammed or will solely be crammed in distinctive instances. For this, the Company can even facilitate transfers throughout the Group through an inside job market. The workforce discount measures will take impact for Volkswagen AG from January 2024, seamlessly following on from the “Digital Transformation Roadmap” settlement concluded between the Company and the worker representatives in 2019.