What’s gone wrong at Volkswagen?

- Leadership - Nov 23, 2016

With the recent news that Volkswagen is going to be cutting 30,000 jobs (and not forgetting the emissions scandal nightmare from earlier this year), we ask; What’s gone wrong at Volkswagen?

30,000 jobs at The Volkswagen group are going to be slashed at the company’s core brand and 23,000 jobs will go at the company’s base in Germany despite the German base only having 114,000 employees anyway. Employees in North America, Brazil and Argentina could also lose their jobs. The cuts will come from buyouts, early retirements and by reducing part-time staff. According to Volkswagen, this will aim to save the business over 3.7 billion euros each year from 2020, However; the automobile maker has promised that there will be no forced redundancies in Germany over the next eight years.

Herbert Diess (the head of the core Volkswagen brand) said: “We are expanding new capabilities in future-oriented areas and creating around 9,000 new jobs. For example, in software development. Our goal is to fill as many positions as possible internally. We will therefore intensively look after the further training of our employees.”

The reason why Volkswagen has to save so much money is because of the recent diesel emissions scandal which begun in September 2015 which affected vehicles worldwide.

It was found that Volkswagen had purposely programmed its TDI diesel engines to cheat pollution tests during laboratory testing. It caused the cars to emit more than 40 times more NOx (nitrogen oxides) in real-world driving than the US standard which made it look like the vehicles were greener than they actually were. This affected more than 11 million cars worldwide.

As a result of all this, Volkswagen was forced to speed up its electric future as a result of the emissions issue. Earlier in the year, the company announced its Strategy 2025 announcement that will see 30 new EV (electric vehicle) models released over the next decade (which will be built at its factories in Zwickau and Wolfsburg).

Matthias Muller (Volkswagen’s Chief Executive Officer) told reporters: “This future pact is the largest reform programme in the history of the core brand of our group. It will make Volkswagen efficient, productive and competitive. At the same time, it will enable the brand to advance the technologies and trends that will shape the future of the automotive industry.”

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