VW’s CFO told managers that its “vehicle business is unwell” as its CEO asserted that costs are running too high
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Volkswagen finds itself in a difficult position, the brand’s CEO divulged this week during a fiery internal meeting. Costs are getting too high, Thomas Schäfer told his managers, asking them to freeze spending as it looks for billions in savings.
The gloomy outlook came as part of an hour-long meeting with more than 2,000 VW managers this week. The CEO laid out the difficult path that Europe’s largest automaker has ahead of it.
“The roof is on fire,” Schäfer said before telling the group that “we are letting the costs run too high in many areas,” per Autocar. He further indicated that the coming weeks and months will be “very tough” for the company.
Read: Audi CEO Ousted Reportedly After Falling Behind Rivals, Will Be Replaced By VW Group Exec
He asked the managers to find “small wins” and said that VW will introduce new “performance programs” that aim to save the automaker as much as €10 billion ($11.23 billion USD at current exchange rates) over the next three years.
The calls come as sales slow in China, where the automaker has been forced to join in a protracted price war. Competition in the country, the largest auto market in the world, has tightened as domestic automakers’ share of it has increased.
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However, the brand’s chief financial officer, Patrik Andreas Mayer, suggested that the problems run deeper than that during the call. He told managers that “our vehicle business is unwell,” and called the address a “last call.”
Schäfer attributed the problems to “structures and processes” that are “too complex, slow, and inflexible.” He called on the managers’ “team spirit” to inspire them to help right the ship.
