CEO of Volkswagen: ‘The Ceiling Is Ablaze’

As per Wards Auto, Schaefer addressed the challenges Volkswagen is encountering over the coming weeks and months. He emphasized the need for incremental victories and unveiled a plan to significantly reduce expenditures at the automotive behemoth. Schaefer promptly called for a halt in spending, citing excessive costs across various areas.

To achieve cost savings, Schaefer introduced an $11.2 billion “performance program” that Volkswagen will roll out over the next three years, a plan that has already been deliberated at the board level. He stressed the necessity for Volkswagen to become more agile in adapting to a rapidly evolving market, particularly in the midst of fierce competition in its major market: China.

Volkswagen’s strategy to electrify its vehicle lineup while maintaining its traditional combustion-engine business has faced challenges. The initial electric vehicle offerings have encountered difficulties, deterring customers. Following the diesel emissions scandal in 2015, Volkswagen has noticeably altered its products and reduced costs. This includes transitioning from physical buttons to touch-capacitive controls and enhancing the previously lackluster infotainment system, a step that is being addressed with the upcoming ID.7 sedan.

During the meeting, Schaefer remarked, “Our organizational structures and processes are still overly intricate, slow, and rigid.” Shortly after Schaefer’s comments, the chief financial officer, Patrick Andreas Mayer, painted a more pessimistic picture of Volkswagen’s situation. Mayer described Schaefer’s directive to reduce spending as a final warning for Volkswagen.

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