VW found a way to cut its costs by 2.0 billion dollars image

In its quest to cut costs in order to cope with the emissions scandal financial repercussions, Volkswagen has found a way to make some 2.0-billion-dollar savings (1.9 billion euros).

There are recalls to be taken care of, fines from regulators and lawsuits pending. Volkswagen has already announced it has to make some budget adjustments, with an estimated cost for the company of 8.7 billion euros. 17.1 billion euros a year, or 18.3 million dollars, are foreseen in the previous budget for investments in vehicles, factories and for research & development, and cuts from those areas are unavoidable, and therefore the company decided to reduce expenses by 1 billion euros. But with a huge amount of bills piling up, further cuts are mandatory. So, the Volkswagen brand intends to get rid of some variants and trim options to cut the costs and to simplify the production process. This cost-saving approach has been revealed by Bernd Osterloh, the automaker’s top labor representative, in a briefing with journalists at VW’s headquarters in Wolfsburg.

“We from the works council have long flagged the huge range of model variants and different components,” said Osterloh, a supervisory board member of the VW Group. “That brings enormous complexity and adds to costs, for example, for logistics. We can take out costs there on a large scale and don’t have to talk about job cuts.” Savings will be an important factor of the future budget plans, as customers are holding back on buying new VW cars because of the uncertainty created by the scandal, Osterloh said. To respond to slowing demand, the manufacturer intends to reduce production to avoid an unnecessary large inventory of unsold vehicles, added Osterloh, who represents VW’s 600,000 workers to the company’s management.

Via Bloomberg