VW cans €100m design centre as part of €1bn cost-cutting drive

Published: 21 November 2015

► Flagship design studio on ice
► 
VW confirms €1bn cost cutting

► Designed to shore up #dieselgate

Volkswagen has confirmed more details of its cost-cutting programme in the wake of the global #dieselgate emissions crisis - and its new design centre in Wolfsburg has been put on ice, just days after group styling chief Walter de Silva announced his retirement.

Putting the flagship design HQ on hold will save €100 million (£70m), board members admitted. Capital expenditure is being cut by €1 billion (£700m) in 2016, as the company shores up funds to fix cars affected by the emissions cheat software. And bosses warn that more cuts are likely to follow in the coming weeks.

VW had planned to spend €13bn (£9bn) next year, but that has been shrunk to €12bn (£8.4bn). One interesting nugget to emerge was that 50% of that capital investment will be focused in 28 locations in Germany: a good sop to pacify local politicians and public sentiment at war with the people’s car maker.

VW cuts: what’s been delayed or cut

The supervisory board met on Friday 20 November and confirmed:

  • New design centre in Wolfsburg ‘put on hold’
  • New paint shop in Mexico ‘will be reviewed’
  • Electric successor to the Phaeton ‘delayed’
  • Board member for Human Resources Dr Horst Neumann retires
  • CEO Matthias Mueller temporarily runs HR role
  • Berthold Huber, Hartmut Meine step down from executive body
  • Jörg Hofmann and Johan Järvklo join VW supervisory board

‘We are operating in uncertain and volatile times and are responding to this,’ said Matthias Mueller, chairman of VW. ‘We will strictly prioritise all planned investments and expenditures. As announced, anything that is not absolutely necessary will be cancelled or postponed.

But he vowed not to cut investment in alternative fuels and promised a fast-track focus on electric drive for VWs, Audis and Porsches. ‘We are not going to make the mistake of economising on our future. For this reason we are planning to further increase spending on the development of e-mobility and digitalisation.’

VW emissions scandal: an explainer.

By Tim Pollard

Editorial director of CAR's digital publishing arm. Motoring news magnet

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