VW Plans for Turnaround

Washington DC July 14, 2005; The AIADA newsletter reported that in an effort to stop their slide into the red, Volkswagen company officials said Wednesday the automaker needed billions of dollars in cost cuts and recommended the departure of its personnel chief Peter Hartz amid a corruption scandal, reports The Associated Press. Wolfgang Bernhard, a former DaimlerChrysler AG executive drafted in May to head the reorganization of VW, says "no sacred cows" would be spared in the search for improvements, and that engineers have already identified ways to cut $1,000 from the cost of producing its flagship Golf. Among the other actions VW prepares to take include, squeezing suppliers and sharing more components to lift net earnings by 4 billion euros ($4.9 billion) by 2008, including a pretax improvement of 7 billion euros ($8.6 billion) at its main VW brand.