Volkswagen CEO Martin Winterkorn said that the multi-brand automotive group "urgently" needs higher profit to help fund future expansion, according to Reuters.
"Over the short-term, we urgently need more efficiency and higher profit," Winterkorn told a staff gathering today at VW's main factory in Wolfsburg, Germany.
Winterkorn plans to cut costs by $6.7 billion a year from 2017 as part of efforts to streamline work processes at all levels of VW's namesake brand, its biggest division by revenue and deliveries.
Bernd Osterloh, VW's works council chief who also sits on the supervisory board, has urged management to cut out its own mistakes as it reviews corporate strategy. Management must prepare production plans - especially in car-body making - more carefully to reduce unnecessary overtime, and improve sales operations in foreign markets, he wrote in an internal document dated July 17 obtained by Reuters.
The company last week announced it is spending $900 million, including $600 million in Tennessee, to assemble a new sport utility vehicle at its Chattanooga plant with plans to hire 2,000 people.