Improving Performance and Saving Costs
Volkswagen is actively implementing the “Accelerate Forward/Road to 6.5” program across all departments and levels. Various measures have been put in place and are currently in progress, including:
- Reducing the development time for new Volkswagen models from 50 to 36 months to ensure quicker market entry without compromising quality or safety. This initiative is expected to save more than one billion euros by 2028.
- Cutting down the number of test vehicles in Technical Development by up to 50 percent through digitalization and technological advancements. This move could potentially save around 400 million euros annually while maintaining testing quality.
Additional measures include enhanced procurement services for annual savings exceeding 320 million euros, improved after-sales business to generate over 250 million euros annually, and optimizing production time based on site agreements for saving more than 200 million euros each year. All these strategies are set to be implemented by 2024.
Ensuring Job Security through Strategic Cuts
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Volkswagen AG’s focus on performance improvement also includes targeted administrative job reductions to achieve sustainable cost efficiency while safeguarding jobs in Germany. Leveraging the upcoming retirement wave of baby boomers, the company will offer partial retirement to employees born in 1967 (1968 for those with severe disabilities). Ongoing workforce reduction tactics like freezing new hires and maintaining Tarif Plus stability will continue.
Volkswagen AG aims to decrease administrative staff costs by 20 percent, with the option of selectively offering termination agreements at all levels if required. While not implementing a general termination program, the company will refrain from filling future open positions or only do so in exceptional cases. An internal job market will facilitate intra-group transfers. These workforce reduction efforts will come into play for Volkswagen AG starting January 2024, following the 2019 agreement on the “Digital Transformation Roadmap” reached between the company and employee representatives.