Friday, July 15, 2005

New VW chief says employees must be ready to adjust

Associated Press

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BERLIN -- The new head of Volkswagen AG's core brand says the struggling automaker's employees must be "ready to tread new paths" and warned that "if we carry on as we have so far, we won't make it."

Wolfgang Bernhard, a former DaimlerChrysler AG executive brought to VW earlier this year, made the comments in an interview with the company's in-house magazine, Autogramm.

Intense competition that is hurting carmakers in the United States, a weak U.S. dollar and sluggish demand in Europe last year hammered profits at Wolfsburg-based VW.

"I expect everyone to be clear about what situation we are in and what a crossroads we are standing at," Bernhard said when asked what he expects from employees. "And I expect everyone to play a part and be ready to tread new paths."

Earlier this week, the automaker said it was preparing measures such as squeezing suppliers and sharing more components to lift net earnings by 4 billion euros ($4.9 billion) annually by 2008.

Presenting those measures Wednesday, Bernhard pledged that "no sacred cows" would be spared in the search for improvements.

While most of the planned savings would come from materials, he wouldn't rule out the sale of parts factories. Analysts have viewed the company as hamstrung by overcapacity.

He also was vague about whether jobs might eventually be cut.