VW board to meet again to discuss further actions in emission scandal image

After last week’s readjusting budget plan, Volkswagen AG supervisory board will meet again at the beginning of December to analyze the necessity for further budget cuts.

Because there is a need to cut costs in order to deal with the ramifications of the emissions scandal, Volkswagen has already decided to reduce expenses by 1 billion euros. Chief Executive Officer Matthias Mueller planned last week to discuss the modified investment plans and capacity with workers. The company has already stopped the work on a design center in Germany and a paint shop in Mexico, putting on hold more investment plans. According to sources familiar with VW’s further intentions, the board has decided on an another meeting for the 9th of December, on the agenda being discussions over regulator’s evaluation of the emission solution proposed by the company, as well as a more extensive budget cut. The readjustment of the investment plan is part of a new strategy Chief Executive Officer Matthias Mueller intends to disclose next year, said people aware of the plans.

Volkswagen said Friday it would reduce spending on production facilities to 12 billion euros ($12.8 billion) next year, down from 12.9 billion euros under the previous investment budget. “This is clearly just the beginning as you can’t halt everything at once,” said Frank Schwope, a Hanover-based analyst at NordLB. “It’s urgently needed. The company needs to save, save, save.” The recently announced spending plan was only for one year, rather than the five-year previous plan, to allow the company to maintain flexibility and to cope with further expenditures that will definitely come. These measures will have to be discussed by Matthias Mueller will with workers’ leaders and will involve all of the Group’s 12 brands and over 300 models.

Via Bloomberg