VW May Freeze Promotions, Cost Cut Next Golf Amid Scandal
German business magazine Manager Magazin reported Saturday (via Reuters) that managerial promotions may be frozen beginning next year as the company looks to save money wherever it can amid the diesel scandal.
The company may also re-use as many parts possible when developing the eighth-generation Volkswagen Golf in order to cut costs.
After already setting aside 6.5 billion euros to cover costs associated with the largest scandal to hit the German automaker in over 50 years, it is still looking at an estimated final bill of 30 billion euros to cover the costs of fixing nearly 11 million affected cars, lawsuits and other associated charges.
Works council chief Bernd Osterloh doesn’t believe the freeze on promotions will be put in place, though expects other measures to be taken further up the ladder.
“We expect to see other symbols first: for instance, clear statements on management’s stance on bonus payments. The motto needs to be to lead by example,” Osterloh said in a statement to Reuters.
If the rumored measures are put in place, they will follow a massive cost-cutting initiative that will slash R&D spending at the automaker.
In 2006 US Government's debt was 8 trillion. 9 years later it is 18 trillion. Did US Government freeze promotions and cut bonuses and useless programs?
There is also the fact that there are too many brands in the VW portfolio. Except for the Persian Gulf countries - are Bugatti or Ducati really that essential to VW's core business? Rolls and SEAT are two additional brands that could be spun off or in the case of SEAT merged with Skoda.
VW had their national dealer meeting last week in Orlando, and according to a post on TDI Club some sort of announcement will be coming this week about affected U.S. cars and compensation. There was mention of gift cards and some sort of amount of cash to get people out of the cars that have problems. So we'll see. Either way it's gonna be pricey for them.
VW to freeze promotions, with Matthias Müller as Snow Miser! Get that man a straw hat!