Volkswagen - Getting The Bugs Out - Businessweek

9/6/2015
Volkswagen:GettingtheBugsOutBusinessweek
Markets
Insights
Video
SigninwithFacebookOruseyourBusinessweekaccount
Email
Rememberme SignIn
News
Search
Menu
LIVE
PasswordForgotpassword?
AlreadyaBloomberg.comuser?
Signinwiththesameaccount.
Don'thaveanaccount?Signup.
Help!Ican'taccessmyaccount.
GlobalEconomics
Volkswagen:GettingtheBugsOut
ByGailEdmondsonMarch09,2007
Afterfouryearsofrestructuring,theGermanautomakerisoptimisticaboutchallengingToyotausingbrandaccountabilityandcentralization
Volkswagen(VLKAY)ChiefExecutiveMartinWinterkornpresentedanupbeatforecastforEurope'slargestautomakerMar.9thatdepartedsharply
fromtheblackmoodanddirewarningsoflostcompetitivenessayearagobyformerCEOBerndPischetsrieder.
AssunlightstreamedthoughtheglassandsteelcustomercenteratVW'sheadquartersinWolfsburg,Germany,formerAudichiefWinterkornandhis
newteamexudedoptimismabouttransformingtheGermanautomakerintoaworldleadingcarcompanythatcandeliverstrongprofitsandchallenge
marketleaderToyota(TM)onqualityandinnovation."WewillbringtheVolkswagengrouptoanewandhigherlevel,"saidWinterkorn,who
http://www.bloomberg.com/bw/stories/20070309/volkswagengettingthebugsoutbusinessweekbusinessnewsstockmarketandfinancialadvice
1/6
9/6/2015
replacedPischetsriederasCEOonJan.1.
FouryearsofrestructuringeffortsbyVW'spreviousmanagementhelpedkickstartasolidturnaroundinperformancelastyear,boostingnetprofitto
$3.7billionfromameager$1.4billionin2005.VW'sgrouprevenuesrose11.6%lastyearto$137billion,poweredbya9.4%jumpinglobalsales.In
WesternEurope,VW'smarketsalesgainednearlyafullpointto20.3%andglobalmarketshareedgedupto9.7%from9.1%ayearearlier.
LossesinU.S.Market
Theworld'sfourthlargestautomakerwillmeetitstargeted$6.72billionpretaxprofitin2008,ChiefFinancialOfficerHansDieterPtschsaid,
despiteapunishingdollareuroexchangerateandrisingmaterialcosts.
Buthighlaborcosts,laggingproductivity,andlossesintheU.S.marketstillweighonprofits.Despitea6.5%increaseinNorthAmericanrevenues,
VWlost$795millionintheregionlastyear,downfrom$1.1billionin2005.Volkswagenislikelytolosemoneythrough2008,MorganStanley
(MS)analystAdamJonasnotedinrecentreport."FixingtheU.S.isourNo.1priority,"saidoneVolkswagenboardmember.Theoperatingmargin
forVW'sautomotivedivisionin2006wasascant1.2%,comparedwiththe5.2%itearnedin2002.
Volkswagen'sproductstrategyalsohasbecomeblurredfollowingabidtomoveupmarketinthelate1990sandtochallengeMercedeswiththe
approximately$80,000Phaetonluxurysedan.ThePhaetonhassoldpoorlyandcontributedtoVW'slosses.Lastyearmanagementpulledthemodel
fromtheU.S.market.
BetterBestPractices
Overthelast18monthsVolkswagenhasrefocusedonsmallermassmarketvehiclessuchastheFoxmini,butthecompany'smarketstrategyremains
fuzzyanditsmassmarketbrandssuchasSkodaandSEAToverlapwiththeVWbrand.WinterkornsaidheaimstohonetheVolkswagenbrand
imageasamidmarketinnovatorthatdeliverssolidvalueforthemoneyandtopquality.ThesecornerstonesofVW'simagealloweditinthepastto
commandahandypricepremiumovercomparablemodelsfromrivals.
RestoringstrongerpricingtoVW'smodelswillbeoneofWinterkorn'stoughestchallenges.Qualityhasbeenrisingatallautomakersoverthepast
decadeasbestpracticemanufacturingtechniquesandprocessesbecomestandardizedaroundtheworld.Jumpingtothetopofthereliabilitycharts
nowrequiresnotonlycuttingedgepracticesbutflawlessmanagementexecution.PorschenowplacesatthetopofJ.D.Power&Associate'srankings,
butonlyafteradecadeofimplementingToyota'stotalqualitymanagementprinciplesandinvestinginextensivetraining.
VW,ontheotherhand,hasalongwaytotravel.InJ.D.Power's2006U.S.initialqualitysurvey,theGermanautomakerrankedthirdfromthebottom,
with171problemsper100vehicles,farworsethantheindustryaverage.Inthereliabilitystudy,whichtestscarsthatarethreeyearsold,VWhardly
faredbetter,rankingsixthfromthebottomand,again,sharplybelowtheindustryaverage.
NoMoreFreeRides
2/6
9/6/2015
VWboardmemberandPorscheCEOWendelinWiedekingsaysaToyotalikeapproachtocontinualimprovementinprocessesandmanufacturing
willbeintroducedatVW,buttheGermanautomakerisoneofthelasttointroducesuchchange.Porschetookacontrolling27.4%stakein
Volkswagenlastyear.
Trimmingcostswon'tbeeasy.FormerCEOPischetsriederandformerVWbrandmanagerWolfgangBernhardbothofwhomsteppeddownJan.1
alreadyhadwhackedawayatmuchoftheexcessstaffingandrootedoutobviousinefficiencies.LastyearPischetsriederwonanagreementwith
labortocut20,000jobsthroughvoluntarybuyoutsandtoextendVW'seasygoing28hourworkweekto35hours.
Lastyear,7,000workerstookthevoluntarypackage.AndVWalreadysourcessome$1billionayearinpartsfromChina.Tofindadditionalgains,
WinterkornandhisteamwillhavetotransformVWintoahighperformancemachine.
Onewaytoaccomplishthatistoboostaccountability.Tothatend,WinterkornsaidVolkswagenwillbecomemoretransparentbybreakingoutthe
performanceofeachofitsindividualbrandsstartingin2007.Untilnow,thesevenbrandswerereportedaspartoftwogroups,theVWgroupandthe
Audigroup.Thatstructurealreadyhasbeendissolved.Theaimistoachieveareturnoninvestmentintheautomotivebusinessofatleast9%inthe
mediumterm,upfrom5.8%lastyear.
CentralizingR&D
Inresearchanddevelopment,VWusedtoduplicateeffortsacrossitstwobrandgroups.Now,Winterkorn'shandpickedteamofformerAudi
managersisoverhaulingVW'sapproachandcentralizingR&D.OneteamwillcreateabasketofcomponentsandmodulesthatVW'sdifferentbrand
chiefscanthenchoosefromindesigningnewmodelseliminatingcostlyredundancy.
WinterkornalsomustmakesureVolkswagen'sfuturemodelshavemoredesignpizzazz,sincerivalssuchasOpel(GM),Ford(F),andToyotahave
boostedtheirbrandimageandmarketsharewitheyecatchingdesign.HyundaihiredformerAudidesignerPeterSchreyertomakesuretheKorean
automaker'sEuropeanmodelsturnheadsandlurebuyers.Bycontrast,thefifthgenerationGolf,launchedin2004,wasroundlycriticizedasboring.
Tosolvetheproblem,WinterkornhastakenformerAudichiefdesignerWalterMariade'SilvawithhimtoWolfsburgaschiefdesignerfortheVW
group.Winterkornalsohastweakedupcoming2007modelstomakethemmoreattractive.Andde'Silvaistoilingintensivelyonthenextgeneration
Golfscheduledfor2008."Wewant[Volkswagen]tobecomemoreglamorousandhaveasharperprofile,"saysWinterkorn.Andmaybeputthe
difficultpastafewyearsbehindit.
LIMITEDTIMEOFFERSUBSCRIBENOW
FeedMostPopular
Read
Shared
3/6
9/6/2015
Discussed
ChinasZhouKeptSayingtheBubbleBurstatG20Meeting
ChinaMarketVolatilityNearingEnd,SaysCentralBankOfficial
TheOilSandsGlutIsAbouttoGetaLotBigger
HowaBoeingSalesFlopBecametheWorld'sHottestSecondhandJetliner
G20WrestlesCurrencyTensionasZhouSaysBubbleHasBurst
ChinasZhouKeptSayingtheBubbleBurstatG20Meeting
ChinaMarketVolatilityNearingEnd,SaysCentralBankOfficial
SyriasRefugeesFeelMoreWelcomeinEuropeThanintheGulf
TheOilSandsGlutIsAbouttoGetaLotBigger
G20SealsCurrencyPeacePactasChinaSetsOutBubbleCleanup
AddictionTreatmentGoesPublic:AAC'sRecoveryCenterEmpire
WholeFoods,HalfOff
AmericatheRelativelyBeautiful
ObamatoOilIndustry:DrillThere,NotHere
SanctionsAren'tEnoughtoStopPutin,andHeKnowsIt
FromAroundTheWeb
YouMayLike
TheBestSellingCarsof2014(Carophile)
4/6
9/6/2015
25PhotosFor25Years:TheFallOfTheBerlinWall(AllMyFaves)
GiveYourChildsCareeranEarlyHeadStart!(AvivaIndia)
AreYouReadytoBuyaHouse?AnswerTheseQuestionsFirst
(Scripbox)
ChineseStockMarketOutlook:BailOutorBuyIn?(DriveWealth)
SponsoredLinks byTaboola
AdsbyGoogle
TopSIPInvestmentplansCompare&investinbestFunds.0paperwork.Starttoday.www.myuniverse.co.in/ZipSIP
HDFCHomeLoanEMI867...Availloansatjust@9.85%*p.a.Getafreecustomizedquotenow!homeloans.hdfc.com/HomeLoan
"StockTipsforTomorrow"KnowthemostProfitableNSEStocktoBuyTomorrow,Registermobilenowww.premiumstocktips.com/Tomorrow
5/6
9/6/2015
TermsofService Trademarks PrivacyPolicy

2015BloombergL.P.AllRightsReserved
Careers MadeinNYC Advertise AdChoices
WebsiteFeedback Help
blogcommentspoweredbyDisqus
ContinuetoBusinessweek
6/6

Volkswagen - Getting The Bugs Out - Businessweek

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Volkswagen - Getting The Bugs Out - Businessweek

Enviado por

Direitos autorais:

Formatos disponíveis

9/6/2015

TermsofService Trademarks PrivacyPolicy

Você também pode gostar