Wednesday 16 October 2019
 
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Volkswagen plans $4.5bn spend on digitalization

MUNICH, June 5, 2019

German automaker Volkswagen will be investing up to €4 billion ($4.5 billion) in modernization and digitalization projects through 2023 – mainly in administration but also in production.

At least 2,000 new jobs related to digitalization are to be created. This has been agreed by the Board of Management and the General Works Council in their “digital transformation roadmap”.

Agile working methods, improved processes and digitalization are to reduce the burden on employees and speed up processes. Tasks that used to be performed manually are to be simplified through improved IT. Consequently, up to 4,000 jobs in non-production units at Volkswagen AG Passenger Cars, Volkswagen Group Components and Volkswagen Sachsen GmbH will not be restaffed over the coming four years.

A precondition for this is that tasks are eliminated as a result of digitalization, process optimization and organizational streamlining. In addition, further investments in Industry 4.0 and an associated increase in productivity of five percent per year in production units through 2023 were also agreed.

Furthermore, the budget for training is to be increased by a further €60 million to a total of €160 million to take account of the human resources transformation under Volkswagen’s digitalization offensive. A uniform employment guarantee for Volkswagen AG and Volkswagen Sachsen GmbH through 2029 has also been agreed.

Ralf Brandstätter, chief operating officer of the Volkswagen brand, said: “Our digital transformation roadmap adds further momentum to the modernization of Volkswagen. We are laying the sustainable foundation for making the company fit for the digital era. We are accumulating new digital expertise, and making all areas of our organization faster, leaner and more competitive.

“At the same time, we are creating new, modern digital and agile jobs and improving our productivity. ‘New Volkswagen’ is becoming more tangible for our employees. If we have to eliminate jobs as a result of digitalization we are doing so along the demographic curve in the most socially responsible manner possible.”

The cost reductions accompanying the investments also help Volkswagen to finance the transformation from its own resources. The brand has set its sights on achieving an operating return on sales of six percent by 2022. That is three years earlier than originally planned.

Thomas Schmall, CEO of Volkswagen Group Components, added: “For our components plants, the digital transformation roadmap is the catalyst for our transformation to e-mobility. Going forward, we will be taking responsibility for battery cells and battery systems through electric drives to charging infrastructure and recycling – for that we need process digitalization, greater software expertise and lean and agile steering of our worldwide component activities.”

The projects include cutting-edge IT solutions such as SAP 4/Hana, in particular for administrative applications, a highly-efficient purchasing system and new standard human resources applications. – TradeArabia News Service




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