Pischetsrieder, Bernhard need to put a lot of work into VW

Wolfgang Bernhard

WOLFSBURG, Germany. Wolfgang Bernhard will have a busy first day on the job Tuesday, Feb. 1.

Not long after Bernhard, 44, officially becomes a member of the Volkswagen group board of management, he sits in his first board meeting.

Chairman Bernd Pischetsrieder wants the former DaimlerChrysler manager to get to know all facets of the VW group as quickly as possible.

There are more areas of need at the VW group than Pischetsrieder would like. He wants Bernhard to tackle the most important repairs.

The former Chrysler group COO cut about 20,000 jobs while there. Bernhard will need all his cost-cutting and troubleshooting skills when he takes over the VW brand at the end of the year. Industry experts agree Bernhard faces one of the most difficult tasks in the industry.

VW's overcapacity is a pressing problem. It is also worrying that the Volkswagen brand's new-car sales dropped slightly in 2004. Bernhard urgently needs to reverse the trend. The stagnation of production volume should "make him think hard," said a member of the VW works council, who did not want to be named.

Difficult balancing act

But Bernhard will not get very far if the members of the VW works council, who have always had a lot of power within the company, don't cooperate. Bernhard needs the union's help to fix one of VW's acute problems, the slump in unit sales in North America.

Due to the weak U.S. dollar, Pischetsrieder has instructed VW to examine natural hedging concepts such as increasing production of components and/or producing vehicles in North America.

Therefore, the German works council is worried about jobs in Germany.

Bernhard needs to find a solution that is acceptable for both VW stockholders and employees.

Beside taking some pressure off Pischetsrieder, who in the future wants to focus more on VW group strategy, Bernhard will be asked to help with day-to-day business.

Privately, production managers criticize the amount of touchup work needed during assembly of the fifth-generation Golf, especially on the doors.

The highly praised laser welding technology needs improvement, sources say.

It's no wonder that some long-serving managers a looking forward to Bernhard's arrival. They hope he will question supposed taboos.

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