Ever since Ferdinand Piech took an 18.4% stake in Volkswagen through Porsche last October, financial analysts have been buzzing about the chances for faster restructuring at Europe’s largest auto maker. On Feb. 10, Volkswagen finally issued the news that markets have been waiting for, announcing plans to cut up to 20,000 jobs and renegotiate labor contracts to help bring costs down.
“The restructuring will definitely move faster. Piech is the owner now, not just the supervisory board chairman,” says one former VW senior executive. “There won’t be a lot of resistance.”
Thanks to changes to the board, Production Chief Wolfgang Bernhard, who joined Volkswagen in 2004 after having co-authored the turnaround at U.S. auto maker Chrysler, should enjoy the backing and the freedom to do even more restructuring. The VW brand unit, for example, barely broke even in 2005, even though management claims that an earlier restructuring plan is saving the company $4.2 billion a year.