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2005 Frankfurt Auto Show, Part VII

2006 Saturn Sky

2006 Saturn Sky

2005 Frankfurt Auto Show Index by TCC Team (9/5/2005)



VW’s Bernhard Lays Down Ultimatum


Wolfgang Bernhard 2005

Wolfgang Bernhard 2005

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Even as Volkswagen wrapped up a major product offensive with this week’s debut of its Eos hardtop/convertible, the brand’s new boss, Wolfgang Bernhard, told that the future of the German automaker is anything but certain. So is the role its flagship assembly operations, in Wolfsburg, Germanywill play in the future. Workers have less than two weeks left to grant concessions that would shave a thousand dollars more off the cost of assembling a new compact sport-utility vehicle. If they miss the target, work will be transferred to a VW plant in Portugal, said the youthful but hard-driven executive.


Bernhard’s highly visible role at this week’s press preview of the Frankfurt Motor Show marked his official coming out since agreeing to take on the difficult challenge of reviving Volkswagen AG’s flagship brand. More than a few of the ideas he brought with him, Bernhard acknowledged during an interview, were developed during his tenure as chief operating officer at Chrysler. He left DaimlerChrysler during a dispute with board members last year and was shortly after recruited by VW Chairman Bernd Pischetsrieder.


“It is clear,” said Bernhard, that leaders of the normally militant German labor union, IG Metall “understand…the need for change. We have our back against the wall. We can’t give anything anymore. The only thing we can give is the future of Volkswagen,” if workers help make the company more competitive. The challenge, he lamented, is getting the rank-and-file to understand the urgency and go along.


Working out of the spotlight, Bernhard has been implementing a number of changes designed to reduce costs on what observers described as an equally bloated white collar operation. To speed up the development of the sport compact, Bernhard brought nearly 300 key planners, engineers and managers together for a week-long summit session, dividing them up into 30 teams. “There were no excuses. Everyone was there. We put them in a big room and locked them up,” he explained, and told them no to do anything but work on this vehicle.”


Each night, Bernhard was handed a “report card” outlining the day’s efforts and calculating the projected savings each team had generated. “By the time we got 2000 euros, everybody cheered,” he recalled, adding that this saved the project, but it will still take union concessions to bring it home to Wolfsburg . Bernhard’s boss has been equally tough, Pischetsrieder telling the union that it can no longer justify the no-cut contract and shortened work week negotiated under former CEO Ferdinand Piech.


While problems at home are getting much of the attention, VW AG has a variety of other issues to address, including the slump in its U.S. operations, and its continuing decline in China, where it was long the industry’s leading brand. But without a turnaround in Germany, Bernhard stressed that the automaker’s future is, at best, uncertain.






VW Taking a Breather


2007 Volkswagen Eos

2007 Volkswagen Eos

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It has been a busy year for Volkswagen, with the launch of an assortment of new products, such as the Golf and the new Eos, an unusual hardtop/convertible. In a fast-changing market, where the competition is rolling out more product than ever, VW needs to expand its portfolio, not only updating its current vehicles but adding anywhere from five to ten models targeting new segments by 2010, said Wolfgang Bernhard, head of the flagship VW division. “If you don’t play offense, you’re not going to succeed,” he said during an interview.


But don’t expect them to reach market in the near future. In a process that Bernhard admitted is decidedly out-of-date, VW has tended to cluster product launches together, then gone for several years with little new to show the public. In the future, he emphasized, the German automaker will work on staggering the roll-out cadence, even if it means delaying the replacement of existing products.

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