VW may axe Taos and Jetta under restructure

[SC Maintenance]

We should pay attention to what's happening to VW because likely the same will happen to Ford and Chevy.
They refuse to innovate and reduce prices, but instead, every time there is a crisis, their solution is always to cut models and staff, aka "consolidate". In the end, they will offer a handful of models that are still expensive and they will act surprised they're loosing market share. Then, they will ask for taxpayer money. Rinse and repeat.

It already did. In 2008.

Sequel to follow.

 

[KrisZ]

VW's problem, or one of their key problems, is their distributed (and old) factories, specifically far too many of them. This creates factory underutilization with excess unused capacity, far too many employees, supply chain nightmares. Overhead cost nightmares...

VW employs roughly 60% more workers than Toyota despite producing a comparable number of vehicles. And we are solidly in the age of automation. Automate or slide into history.

Close factories, lay off 100K, and consolidate manufacturing.

CEO Blume has numerous difficult decisions to make. VW faces high restructuring costs, plunging profits in China, and falling operating margins. It won't be pretty.

Those decisions cannot be that hard because the CEOs usually get a pretty substantial pay bonus afterwards.

 

[JeffKeryk]

Those decisions cannot be that hard because they usually get a pretty substantial pay bonus afterwards.

I remember when CEO Stemple announced GM layoffs the size of Chrysler. He got a big fat bonus. I think it was CEO Toyoda or someone who said, "If I made that announcement my job would be the first to go."

 

[KrisZ]

I remember when CEO Stemple announced GM layoffs the size of Chrysler. He got a big fat bonus. I think it was CEO Toyoda or someone who said, "If I made that announcement my job would be the first to go."

And I think if western corporations did something similar to the leaders, or at least gave them a substantial pay cut, we would see a much different and more thoughtful decision making process from these leaders.

 

[SC Maintenance]

VW's problem, or one of their key problems, is their distributed (and old) factories, specifically far too many of them. This creates factory underutilization with excess unused capacity, far too many employees, supply chain nightmares. Overhead cost nightmares...

VW employs roughly 60% more workers than Toyota despite producing a comparable number of vehicles. And we are solidly in the age of automation. Automate or slide into history.

Close factories, lay off 100K, and consolidate manufacturing.

CEO Blume has numerous difficult decisions to make. VW faces high restructuring costs, plunging profits in China, and falling operating margins. It won't be pretty.

Easier said than done.

There most underutilization of factories is in Germany. As discussed, one of the German provinces has 20% of the board of director vote.

The next most underutilized is in China. Abandon largest auto market on earth? Likely the correct plan at this point, but very hard to do in a globalized world.

Close plants in other countries, like USA? Easy to do, but were moving to a world of protectionism - not just here. So you close the plants in a country you may very well not be able to sell there competitively in the near future.

They have a series of very hard choices to make. There are two many car companies for what amounts to a shrinking pool of buyers, and countries like USA and China not wanting to make it easy to import foreign cars. VW is the poster child of globalism, and maybe one of its first casualties as it implodes.