VW to shuffle managers in growth pursuit, sources say
 | Winterkorn: Planning major board changes? |
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FRANKFURT (Reuters) -- Volkswagen is planning an extensive reorganization of managers to keep Europe's biggest car maker focused on growth targets as VW is absorbing brands and increasing market footprints, according to people familiar with the matter.
VW will create a special portfolio for China on its management board to oversee the German manufacturer's future expansion in its biggest market, two people said on condition they not be identified because the matter is confidential.
Leif Oestling, CEO of Swedish truck maker Scania, which is majority-owned by VW like German rival MAN, will join the Wolfsburg-based company's management board to push steps to forge a trucks alliance between Scania, MAN and VW's commercial-vehicle unit, the two people said.
"A massive overhaul is pending to ready the company for 2018," one of the sources told Reuters.
VW's 20-member supervisory board will gather on Friday to approve the changes, the people said. A VW spokesman declined to comment.
VW has pledged to become the world's biggest and most profitable car manufacturer by 2018, aiming to overtake General Motors Co. and Toyota Motor Corp. by boosting auto deliveries across its multi-brand group to 10 million annually. Four-month sales this year rose 8.6 percent to 2.89 million vehicles.
Expansion at VW is also progressing at brand level. The company is aiming to purchase the second half of Porsche SE's car-making operations and VW's Audi luxury division in April bought Italian motorcycle maker Ducati. Separately, VW further increased its majority holding in MAN this year.
Planned changes suggest that VW is hard pressed to beef up its China business, which has been run by Karl-Thomas Neumann, former CEO of parts-supplier Continental AG, since September 2010.
VW, the first overseas car maker to enter China three decades ago, is currently building factories in Foshan, Yizheng and Ningbo to strengthen representation in southeastern China. The German company, which aims to spend 14 billion euros on new factories and products in China through 2016, said in April it will build a new factory in western China.
VW's top management is displeased with the performance of Neumann who in the future will be asked to report to a newly appointed member on the executive board, the two people said. It's unclear whether Neumann, who has even been named by analysts as a possible candidate to replace VW CEO Martin Winterkorn when he retires, will stay with the company, the people said.
While shuffling managers, VW will keep workers happy by granting an ample 4.3 percent pay increase for Germany-based staff.
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