VW Brand Offers Early Retirement for Managers

Volkswagen AG’s VW unit hopes to make its management structure “younger and slimmer” by offering early retirement packages to executives who are between 57 and 62 years old.

The program is similar to one being offered to other VW workers in a bid to cut costs, reduce bureaucracy and increase productivity, says brand CEO Herbert Diess. He says the overall aim is to make similar proportional reductions in both groups of employees.

Diess reiterates that a primary goal for the brand is to establish a flatter hierarchy and a more entrepreneurial approach that encourages manager to shape policy, not merely administer the decisions of others. He says the unit will encourage an influx of junior managers by looking for candidates with practical experience, then challenging them to prove themselves for a year by completing a “specific management task.”