BERLIN -- Volkswagen isn't just unveiling a Golf-based SUV in Geneva this week. It will show a new business model as well.
VW brand Chairman Wolfgang Bernhard is shaking up VW's high-wage German operations by cutting manufacturing costs, reducing head count and threatening to sell or close in-house component units as VW adjusts capacity.
VW joins Renault SA, General Motors and Ford Motor Co. in attempting to make production in western Europe more profitable.
VW's Concept A prototype, a design study for the brand's long-awaited medium SUV, is a prime example of this restructuring. The SUV will be built in Wolfsburg, Germany, using the Auto 5000 model, an existing VW wage-reduction program that Bernhard pushed through.
The change will save about $1,000 per vehicle on the SUV, Bernhard said.
Auto 5000 uses workers who get paid substantially less than the VW brand's 103,000 German employees.
"Auto 5000 has proven to be a very successful model," Bernhard said here Feb. 16.
"The model still saves a lot of money, and there's a great deal of potential in it for the future production of VW vehicles."