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VW's Winterkorn tells 20,000 staffers of big cost-cutting plans

During a gathering of 20,000 Volkswagen Group employees at company headquarters in Wolfsburg, Germany on Wednesday, CEO Martin Winterkorn dropped a bombshell. The boss stated that the automaker isn't operating efficiently enough and admitted the company needs to radically start cutting back to raise its profit margins. To right the ship, Winterkorn has proposed killing off less profitable models and spending less on research and development.
According to Reuters, Winterkorn wants to raise the VW brand's profit margin from about 2.9 percent in 2013 to a target of 6 percent. To make that possible, his plan amounts to increasing cost cutting until Volkswagen reaches about 5 billion euros ($6.7 billion) per year to get things back in order. "Over the short-term, we urgently need more efficiency and higher profit," the CEO said during his speech, according to Reuters.
However, Winterkorn can't make these decisions unilaterally. Volkswagen's works council also has a seat on the supervisory board to represent laborers, and it isn't likely to take the proposed cuts sitting down.

We drive the Bronco Sport Sasquatch, Hummer EV SUV and more | Autoblog Podcast #846

In this episode of the Autoblog Podcast, Editor-in-Chief Greg Migliore is joined by Road Test Editor Zac Palmer. Zac recently went down to Tennessee to drive a prototype of the 2025 Ford Bronco Sport Sasquatch. Meanwhile the two also spent time in the 2024 GMC Hummer EV SUV, 2024 Mercedes-AMG GLA 35 and 2024 Lexus LS 500h out of the fleet in Michigan. In the news, Rivian deals with a fire at its Normal, Illinois plant, Formula 1 comes back strong, and Volkswagen prices the ID.Buzz. Lastly, the two debate what old, executive sedan you should buy in a Spend My Money segment. Send us your questions for the Mailbag and Spend My Money at: Podcast@Autoblog.com. Autoblog Podcast #846 Get The Podcast Apple Podcasts – Subscribe to the Autoblog Podcast in iTunes Spotify – Subscribe to the Autoblog Podcast on Spotify RSS – Add the Autoblog Podcast feed to your RSS aggregator MP3 – Download the MP3 directly Rundown Cars we're driving 2025 Ford Bronco Sport Sasquatch 2024 GMC Hummer EV SUV 2024 Mercedes-AMG GLA 35 2024 Lexus LS 500h News Fire at the Rivian factory Formula 1 is back Volkswagen ID.Buzz gets a very high price Spend My Money Feedback Email – Podcast@Autoblog.com Review the show on Apple Podcasts Autoblog is now live on your smart speakers and voice assistants with the audio Autoblog Daily Digest. Say “Hey Google, play the news from Autoblog” or "Alexa, open Autoblog" to get your favorite car website in audio form every day. A narrator will take you through the biggest stories or break down one of our comprehensive test drives. Related Video:  We check out the Rivian R1S and R1T along with 3 other surprises This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

UAW Falls 87 Votes Short Of Major Victory In South

Just 87 votes at the Volkswagen plant in Tennessee separated the United Auto Workers union from what would have been its first successful organization of workers at a foreign automaker in the South. Instead of celebrating a potential watershed moment for labor politics in the region, UAW supporters were left crestfallen by the 712-626 vote against union representation in the election that ended Friday night. The result stunned many labor experts who expected a UAW win because Volkswagen tacitly endorsed the union and even allowed organizers into the Chattanooga factory to make sales pitches. The loss is a major setback for the UAW's effort to make inroads in the growing South, where foreign automakers have 14 assembly plants, eight built in the past decade, said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research, an industry think tank in Michigan. "If this was going to work anywhere, this is where it was going to work," she said of the Volkswagen vote. Organizing a Southern plant is so crucial to the union that UAW President Bob King told workers in a speech that the union has no long-term future without it. The loss means the union remains largely quarantined with the Detroit Three in the Midwest and Northeast. Many viewed VW as the union's best chance to gain a crucial foothold in the South because other automakers have not been as welcoming as Volkswagen. Labor interests make up half of the supervisory board at VW in Germany, and they questioned why the Chattanooga plant is the company's only major factory worldwide without formal worker representation. VW wanted a German-style "works council" in Chattanooga to give employees a say over working conditions. The company says U.S. law won't allow it without an independent union. In Chattanooga, the union faced stern opposition from Republican politicians who warned that a UAW victory would chase away other automakers who might come to the region. Sen. Bob Corker of Tennessee was the most vocal opponent, saying that he was told that VW would soon announce plans to build a new SUV in Chattanooga if workers rejected the union. That was later denied by a VW executive, who said the union vote had no bearing on expansion decisions. Other state politicians threatened to cut off state incentives for the plant to expand if the union was approved.