Volkswagen Re-Organizes As Cost-Cutter Bernhard Quits

Different brands will now operate independently.

Europe's biggest carmaker Volkswagen said Jan. 11 that the head of its flagship VW brand, Wolfgang Bernhard, was leaving in a management reshuffle after overseeing a major structuring of the group. Volkswagen also announced that the group would be re-organizd, with the different brands -- VW, Skoda, Bentley, Bugatti, Audi, Seat and Lamborghini -- to operate independently instead of in two divisions.

Bernhard's departure had been rumored since he was passed over for the role of overall Volkswagen group chief executive following the shock departure of Bernd Pischetsrieder in November. That job went to Martin Winterkorn, the former head of Audi.

A darling of the financial markets, Bernhard oversaw a major restructuring of the VW brand, which includes cutting 20,000 jobs in Germany and making employees work a longer week. He joined the VW board in February 2005 after being credited with turning around DaimlerChrysler's loss-making Chrysler unit after slashing 26,000 jobs there.

The VW brand had just gone into the red for the first time in a decade as a result of slack demand, price wars in the U.S. and increased competition in China. Bernhard's answer was to introduce cost-cutting measures and broker a deal with the powerful IG Metall union that will see VW production workers in Germany work 33 hours a week without an accompanying pay rise, compared with the previous limit of around 29 hours.

Copyright Agence France-Presse, 2007

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