Thursday, 29 October 2015

VW: Five-point plan for recovery

Matthias Müller, Volkswagen, chairman of the board of management, has unveiled a five-point plan to reinvigorate the company; to focus on quality not “faster, higher, larger”.

“We have to look beyond the current situation and create the conditions for Volkswagen’s successful further development,” said Müller.

He presented a five point plan that he “intends to use so that Volkswagen remains one of the world’s leading automobile manufacturers in the future”.

He declared confidence that “Volkswagen will emerge from the current situation stronger than before”.

Müller’s top priority is for support customers affected by the diesel issue with implementation of technical solutions set to begin in January 2016.

Müller’s second priority is to systematically drive forward and complete the investigation into what happened.

“We must uncover the truth and learn from it”, he said. Auditor Deloitte has been engaged to help uncover the truth and Müller said those responsible for what has happened must “face severe consequences”.

Müller’s third priority is to introduce new structures in the Volkswagen Group, with greater decentralisation and more independence for the brands and regions.

Müller said VW will focus on addressing cross-brand strategies, leveraging synergies and ensuring that Group resources are used effectively.

“We will review in detail our current portfolio of more than 300 models and examine the contribution that each one makes to our earnings,” he declared.

As a fourth priority, Müller will “drive forward” a realignment of Group culture and management behavior.

He noted that while the pursuit of perfection, employee commitment and social responsibility in the Volkswagen Group must be retained, changes are necessary in how VW communicates and how it handles mistakes.

“We need a culture of openness and cooperation,” Müller said.

The fifth priority is to transform Group Strategy 2018 into Strategy 2025.

“Many outside of Volkswagen, but also some of us, did not understand that our Strategy 2018 is about much more than production numbers. A lot of things were subordinated to the desire to be “Faster, Higher, Larger”, especially return on sales.”

Müller said the point is not to sell 100,000 more or fewer vehicles than a major competitor. Instead, the real issue is qualitative growth. Müller announced that the cornerstones of the Group’s Strategy 2025 will be developed over the coming months, and that it would be unveiled mid-way through next year.

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