VW Announces EV Push, Staff Cuts as SEC Files Blockbuster Dieselgate Suit
Volkswagen announced plans last week to build 22 million new electric vehicles in the next decade, boost the number of new EV models it introduces from 50 to 70 by 2028, and cut 5,000 to 7,000 jobs by attrition by 2023, just a day before the U.S. Securities & Exchange Commission (SEC) filed suit against the company for allegedly defrauding investors in the Dieselgate scandal.
Last Wednesday, VW unveiled its plan to restructure and automate its operations “along the demographic curve”, with an estimate that 11,000 of its workers will hit retirement age in the next few years. “Volkswagen adds that it will create about 2,000 jobs in its technical development department, and that it has given its work force a job security guarantee through 2025,” MLive reports from Michigan. “German newspaper Handelsblatt reports the automaker says the move will mainly affect administration workers in Germany as it frees up US$9 billion for research and development.”
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CEO Dr. Herbert Diess said VW “will change radically” as it takes responsibility “with regard to key trends of the future—particularly in connection with climate protection.” By 2050, the company says it will reduce carbon dioxide emissions, power its operations with renewable energy, and “attempt to compensate for any remaining emissions ‘that cannot be avoided’,” MLive states.
“Volkswagen is seeking to provide individual mobility for millions of people for years to come—individual mobility that is safer, cleaner, and fully connected,” Diess said. “In order to shoulder the investments needed for the electric offensive, we must make further improvements in efficiency and performance in all areas.”
To that end, “we will be systematically aligning production and other stages in the value chain to CO2 neutrality in the coming years,” he added. “That is how we will be making our contribution towards limiting global warming.”
More broadly, VW’s focus “is increasingly moving towards the digital transformation,” the company said in a prepared statement. “Implementation of a digitalization roadmap is designed to prepare employees for the digital world of work.”
Chief Operating Officer Ralf Brandstatter said VW “is to become more efficient and agile and a more attractive and modern employer, especially in administration,” where the company is looking for 15% cuts in staff and “non-staff overheads”.
But VW’s accent on responsibility and innovation may have raised eyebrows at the SEC, where officials moved Thursday to file suit against the German automaker and its former CEO, Martin Winterkorn, charging that they were aware of the “massive” diesel emissions scandal as early as November 2007.
“If proven, that would be almost at the scheme’s inception, much sooner than Mr. Winterkorn or Volkswagen have previously admitted and nearly seven years earlier than federal prosecutors alleged in a criminal indictment filed against him and several other Volkswagen executives last year,” the New York Times reports.
“The commission’s timeline severely undercuts Volkswagen’s position that the plot to deceive American regulators about the exhaust levels of the company’s diesel vehicles was entirely the work of lower-level employees, and that Mr. Winterkorn and other top managers only learned of it shortly before the Environmental Protection Agency publicly accused Volkswagen of carrying it out in September 2015,” the paper adds. The suit “could bolster the legal claims of investors seeking billions of dollars in damages from Volkswagen over the scheme,” and “extends a scandal that has already drained the company of vast sums of money it could have spent on the new technologies it hopes to build its future on.”