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VW Works Council Chief Sees Cost-Cutting Plan on Track

Volkswagen Herbert Diess Bernd Osterloh
Bernd Osterloh, right, has butted heads with Herbert Diess, left, over VW's cost-cutting plan. Picture source: DPA.

Volkswagen works council chief Bernd Osterloh sees the automaker on track with its cost-savings program, he told Handelsblatt in an interview. By the year 2020, the carmaker wants to reduce costs at its core VW brand by €3.7 billion ($3.97 billion).

After a dispute between the works council and VW brand chief Herbert Diess on the implementation of the so-called future pact, doubts grew about the success of the program. But that’s all water under the bridge, said Mr. Osterloh: “We had a real thunderstorm, not just a rainshower. But it’s lead to a better climate.”

According to Mr. Osterloh, the cost-cutting target could even be exceeded without relying on cutting jobs.

Savings will come through a strategy including a reduction in the number of model variants, higher discipline in the early production process and a higher cost awareness, he said.

Some €40 million in savings have already been realized through different measures, Mr. Osterloh said. And increased efficiency in vehicle production as well as additional ideas for savings amounting to around €10 million are expected.

With the rigors of the savings program, VW aims to boost its profitability to compete with other automakers.

“I am convinced that VW can develop better than any other auto brand – whether it be Audi, Skoda, BMW or Daimler,” Mr. Osterloh said.

In 2016, VW sold a record number of vehicles, despite all of its problems, he said. “I am particularly pleased that our growth last year shows that our customers believe in the group and its brands.”

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