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Report: Unions Force VW to Dump Cost-Cutting Consultants
Union leaders have forced Volkswagen AG to dismiss McKinsey & Co., the consultants hired to help it cut costs for the VW brand €5 billion by 2018, Reuters reports.
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Union leaders have forced Volkswagen AG to dismiss McKinsey & Co., the consultants hired to help it cut costs for the VW brand €5 billion by 2018, Reuters reports.
Union sources tell the news service that VW's works council balked at McKinsey's appointment because it wasn't consulted. One source claims McKinsey is "preoccupied with cutting the headcount in production."
CEO Martin Winterkorn told VW workers about the €5 billion target three weeks ago. Reuters says labor leaders fear McKinsey would recommend staff reductions at VW's huge assembly plant in Wolfsburg and its partsmaking complex in Kassel.
Reuters' sources say McKinsey's dismissal has not changed the company's €5 billion goal. But it is likely to affect where the cost cutting will occur. Works Council chief Bernd Osterloh reportedly wants VW to reduce R&D spending, which he says has jumped 80% since 2010.
Osterloh previously has recommended that VW management look to its own inefficiencies, starting with production scheduling and foreign sales operations, to help reduce the company's operating costs.
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