Economy, Auto

VW Chief Vows Overhaul

VW Chief Vows OverhaulVW Chief Vows Overhaul

Volkswagen Group CEO Martin Winterkorn, who last month survived an attempted ouster by his boss, told 5,000 VW managers that he plans to restructure the giant German automaker by October, Automotive News Europe said on Monday.

The comments followed a showdown with Ferdinand Piech that led to the former supervisory board chairman's resignation on April 25. "We are preparing the company for the coming 10, 20 years," Winterkorn told 1,000 VW managers last week at a meeting in the company's hometown of Wolfsburg, Germany. Another 4,000 watched a video feed at nearly 60 of the company's operations worldwide.

"It is time to further develop our management model and rearrange structures," he said. "We must become faster, more efficient and more agile."

Winterkorn offered no details, but a supervisory board member said last month that the company will hold a special meeting in June to discuss changes to its leadership structure, such as possibly aligning individual brands more closely.

He said VW's problem areas are being dealt with. He cited flagging US sales for the VW brand, low profitability for the brand globally and the delayed launch of a budget car for China.

"We will redouble our efforts everywhere where we are still punching below our weight," he said. "We have long since started tackling our tasks with the full support of the supervisory board."

VW has pledged to make annual cost savings of 5 billion euros ($5.61 billion) at its VW brand by 2017 as it seeks to close a profitability gap with global leader Toyota.

Winterkorn, 67, welcomed the arrival of former BMW executive Herbert Diess who takes charge of the core VW brand on July 1.

"He is the right man in the right position at the right time," Winterkorn told the meeting. "I look forward to working with him."